What Is The Ownership Structure Like For Derkwoo Electronics Co., Ltd (KOSDAQ:263600)?

The big shareholder groups in Derkwoo Electronics Co., Ltd (KOSDAQ:263600) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Derkwoo Electronics is a smaller company with a market capitalization of ₩123b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are not really that prevalent on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Derkwoo Electronics.

Check out our latest analysis for Derkwoo Electronics

What Does The Lack Of Institutional Ownership Tell Us About Derkwoo Electronics?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Derkwoo Electronics' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Derkwoo Electronics is not owned by hedge funds. Jun-Yong Lee is currently the company's largest shareholder with 38% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 15% and 0.4%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Derkwoo Electronics

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 the majority of Derkwoo Electronics Co., Ltd. This means they can collectively make decisions for the company. That means they own ₩65b worth of shares in the ₩123b company. That's quite meaningful. 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 holds a 46% stake in Derkwoo Electronics. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Derkwoo Electronics you should be aware of, and 2 of them can't be ignored.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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