Here's What Humax Co., Ltd.'s (KOSDAQ:115160) Shareholder Ownership Structure Looks Like

By
Simply Wall St
Published
February 03, 2021
KOSDAQ:A115160
Source: Shutterstock

If you want to know who really controls Humax Co., Ltd. (KOSDAQ:115160), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

Humax is a smaller company with a market capitalization of ₩146b, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Humax.

View our latest analysis for Humax

ownership-breakdown
KOSDAQ:A115160 Ownership Breakdown February 4th 2021

What Does The Institutional Ownership Tell Us About Humax?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Humax. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Humax's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
KOSDAQ:A115160 Earnings and Revenue Growth February 4th 2021

We note that hedge funds don't have a meaningful investment in Humax. Humax Holdings Co., Ltd. is currently the company's largest shareholder with 35% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.0% and 3.8% of the stock.

On studying our ownership data, we found that 12 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Humax

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own less than 1% of Humax Co., Ltd.. It seems the board members have no more than ₩272m worth of shares in the ₩146b company. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly retail investors, hold a substantial 51% stake in Humax, suggesting it is a fairly popular stock. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

Public Company Ownership

We can see that public companies hold 35% of the Humax shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Humax better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Humax (of which 1 is significant!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


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