Retail investors who have a significant stake must be disappointed along with institutions after Samsung Electro-Mechanics Co., Ltd.'s (KRX:009150) market cap dropped by ₩506b

Key Insights

• Samsung Electro-Mechanics' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 50% ownership
• Institutions own 30% of Samsung Electro-Mechanics

If you want to know who really controls Samsung Electro-Mechanics Co., Ltd. (KRX:009150), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 47% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 30% shares weren’t spared from last week’s ₩506b market cap drop, retail investors as a group suffered the maximum losses

Let's take a closer look to see what the different types of shareholders can tell us about Samsung Electro-Mechanics.

See our latest analysis for Samsung Electro-Mechanics

What Does The Institutional Ownership Tell Us About Samsung Electro-Mechanics?

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.

Samsung Electro-Mechanics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Samsung Electro-Mechanics' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Samsung Electro-Mechanics. Our data shows that Samsung Electronics Co., Ltd. is the largest shareholder with 23% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.8% and 2.9%, of the shares outstanding, respectively.

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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Samsung Electro-Mechanics

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Samsung Electro-Mechanics Co., Ltd.. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₩675m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 47% stake in Samsung Electro-Mechanics. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

Public companies currently own 23% of Samsung Electro-Mechanics stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Samsung Electro-Mechanics better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.