W-Scope Chungju Plant Co., Ltd.'s (KOSDAQ:393890) stock price dropped 13% last week; individual investors would not be happy

Simply Wall St · 10/16 01:05

Key Insights

  • Significant control over W-Scope Chungju Plant by individual investors implies that the general public has more power to influence management and governance-related decisions
  • 51% of the business is held by the top 4 shareholders
  • Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of W-Scope Chungju Plant Co., Ltd. (KOSDAQ:393890) can tell us which group is most powerful. The group holding the most number of shares in the company, around 42% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₩620b last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about W-Scope Chungju Plant.

See our latest analysis for W-Scope Chungju Plant

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KOSDAQ:A393890 Ownership Breakdown October 16th 2024

What Does The Institutional Ownership Tell Us About W-Scope Chungju Plant?

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.

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

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KOSDAQ:A393890 Earnings and Revenue Growth October 16th 2024

We note that hedge funds don't have a meaningful investment in W-Scope Chungju Plant. Looking at our data, we can see that the largest shareholder is W-SCOPE Corporation with 36% of shares outstanding. Noh & Partners Corporation is the second largest shareholder owning 7.3% of common stock, and Next Level 1th, LLC holds about 5.0% of the company stock.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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

Insider Ownership Of W-Scope Chungju Plant

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 data suggests that insiders own under 1% of W-Scope Chungju Plant Co., Ltd. in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It has a market capitalization of just ₩620b, and the board has only ₩35m worth of shares in their own names. 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, who are usually individual investors, hold a 42% stake in W-Scope Chungju Plant. 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.

Private Equity Ownership

With a stake of 7.3%, private equity firms could influence the W-Scope Chungju Plant board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

Our data indicates that Private Companies hold 6.6%, of the company's shares. 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.

Public Company Ownership

We can see that public companies hold 36% of the W-Scope Chungju Plant shares on issue. 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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with W-Scope Chungju Plant (at least 1 which is potentially serious) , and understanding them should be part of your investment process.

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.