Cosmo Advanced Materials & Technology Co., Ltd.'s (KRX:005070) market cap surged ₩86b last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• Cosmo Advanced Materials & Technology's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 45% of the company
• 16% of Cosmo Advanced Materials & Technology is held by Institutions

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To get a sense of who is truly in control of Cosmo Advanced Materials & Technology Co., Ltd. (KRX:005070), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 54% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, individual investors benefitted the most after the company's market cap rose by ₩86b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Cosmo Advanced Materials & Technology.

See our latest analysis for Cosmo Advanced Materials & Technology

What Does The Institutional Ownership Tell Us About Cosmo Advanced Materials & Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Cosmo Advanced Materials & Technology does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Cosmo Advanced Materials & Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Cosmo Advanced Materials & Technology. Looking at our data, we can see that the largest shareholder is Cosmo Chemical Co., Ltd. with 27% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.0% and 2.5% of the stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Cosmo Advanced Materials & Technology

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 information suggests that Cosmo Advanced Materials & Technology Co., Ltd. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It seems the board members have no more than ₩13b worth of shares in the ₩1.3t company. We 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 comprising of individual investors, collectively holds 54% of Cosmo Advanced Materials & Technology shares. With this amount 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 vote on acquisitions or mergers that may not improve profitability.

Public Company Ownership

It appears to us that public companies own 27% of Cosmo Advanced Materials & Technology. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Cosmo Advanced Materials & Technology you should be aware of, and 1 of them makes us a bit uncomfortable.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.