Public companies are S-Oil Corporation's (KRX:010950) biggest owners and were hit after market cap dropped ₩373b

Simply Wall St · 10/17 21:12

Key Insights

  • Significant control over S-Oil by public companies implies that the general public has more power to influence management and governance-related decisions
  • 62% of the company is held by a single shareholder (Saudi Arabian Oil Company)
  • Institutions own 15% of S-Oil

If you want to know who really controls S-Oil Corporation (KRX:010950), then you'll have to look at the makeup of its share registry. We can see that public companies own the lion's share in the company with 62% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, public companies endured the biggest losses as the stock fell by 5.2%.

Let's delve deeper into each type of owner of S-Oil, beginning with the chart below.

View our latest analysis for S-Oil

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KOSE:A010950 Ownership Breakdown October 17th 2024

What Does The Institutional Ownership Tell Us About S-Oil?

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.

S-Oil already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of S-Oil, (below). Of course, keep in mind that there are other factors to consider, too.

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KOSE:A010950 Earnings and Revenue Growth October 17th 2024

We note that hedge funds don't have a meaningful investment in S-Oil. The company's largest shareholder is Saudi Arabian Oil Company, with ownership of 62%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 7.1% and 1.4% of the shares outstanding respectively, National Pension Service and BlackRock, Inc. are the second and third largest shareholders.

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 S-Oil

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 S-Oil Corporation in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₩1.5b 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

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over S-Oil. 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.

Public Company Ownership

We can see that public companies hold 62% of the S-Oil 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:

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 S-Oil that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.