Park Systems Corp.'s (KOSDAQ:140860) stock price dropped 3.9% last week; retail investors would not be happy

Key Insights

• The considerable ownership by retail investors in Park Systems indicates that they collectively have a greater say in management and business strategy
• The top 7 shareholders own 51% of the company
• 33% of Park Systems is held by insiders

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To get a sense of who is truly in control of Park Systems Corp. (KOSDAQ:140860), it is important to understand the ownership structure of the business. With 37% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 33% came under pressure after market cap dropped to ₩2.0t last week,retail investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Park Systems.

View our latest analysis for Park Systems

What Does The Institutional Ownership Tell Us About Park Systems?

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.

As you can see, institutional investors have a fair amount of stake in Park Systems. 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. 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 Park Systems' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Park Systems. The company's CEO Sang-il Park is the largest shareholder with 33% of shares outstanding. Norges Bank Investment Management is the second largest shareholder owning 4.6% of common stock, and National Pension Service holds about 3.7% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Park Systems

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Park Systems Corp.. It is very interesting to see that insiders have a meaningful ₩676b stake in this ₩2.0t business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Park Systems. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Park Systems better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Park Systems you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.