Korea Line Corporation's (KRX:005880) biggest owners are private companies who got richer after stock soared 11% last week

Key Insights

• The considerable ownership by private companies in Korea Line indicates that they collectively have a greater say in management and business strategy
• 52% of the business is held by the top 4 shareholders
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

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If you want to know who really controls Korea Line Corporation (KRX:005880), then you'll have to look at the makeup of its share registry. With 49% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by ₩59b last week.

In the chart below, we zoom in on the different ownership groups of Korea Line.

See our latest analysis for Korea Line

What Does The Institutional Ownership Tell Us About Korea Line?

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.

Korea Line 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Korea Line's earnings history below. Of course, the future is what really matters.

Korea Line is not owned by hedge funds. SM Line Corporation is currently the company's largest shareholder with 24% of shares outstanding. TK Chemical Holdings Co., Ltd. is the second largest shareholder owning 21% of common stock, and Dongah Construction Industrial,Co.Ltd holds about 3.8% of the company stock.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Korea Line

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Korea Line Corporation insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about ₩124m worth of stock. This compares to a market capitalization of ₩593b. 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-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 49%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Korea Line (1 is potentially serious) that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.