Daejoo Electronic Materials Co., Ltd.'s (KOSDAQ:078600) market cap dropped ₩88b last week; Retail investors bore the brunt

Key Insights

• Significant control over Daejoo Electronic Materials by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 49% ownership
• Insiders own 28% of Daejoo Electronic Materials

Our free stock report includes 2 warning signs investors should be aware of before investing in Daejoo Electronic Materials. Read for free now.

Every investor in Daejoo Electronic Materials Co., Ltd. (KOSDAQ:078600) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 7.3% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 28% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Daejoo Electronic Materials.

View our latest analysis for Daejoo Electronic Materials

What Does The Institutional Ownership Tell Us About Daejoo Electronic Materials?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Daejoo Electronic Materials already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Daejoo Electronic Materials' earnings history below. Of course, the future is what really matters.

Daejoo Electronic Materials is not owned by hedge funds. The company's largest shareholder is Moo-Hyun Lim, with ownership of 14%. Meanwhile, the second and third largest shareholders, hold 7.5% and 7.0%, of the shares outstanding, respectively. Il-Gyee Lim, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Daejoo Electronic Materials

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Daejoo Electronic Materials Co., Ltd.. It has a market capitalization of just ₩1.1t, and insiders have ₩317b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 51% of Daejoo Electronic Materials shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Daejoo Electronic Materials , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.