Dongjin Semichem Co., Ltd.'s (KOSDAQ:005290) stock price dropped 7.6% last week; individual investors would not be happy

Key Insights

• The considerable ownership by individual investors in Dongjin Semichem indicates that they collectively have a greater say in management and business strategy
• A total of 22 investors have a majority stake in the company with 50% ownership
• 12% of Dongjin Semichem is held by Institutions

To get a sense of who is truly in control of Dongjin Semichem Co., Ltd. (KOSDAQ:005290), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 49% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to ₩1.4t 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 Dongjin Semichem.

See our latest analysis for Dongjin Semichem

What Does The Institutional Ownership Tell Us About Dongjin Semichem?

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.

Dongjin Semichem 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. 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 Dongjin Semichem, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Dongjin Semichem. J&J Chemical Co. Ltd. is currently the largest shareholder, with 32% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.7% and 2.1%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 22 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Dongjin Semichem

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can report that insiders do own shares in Dongjin Semichem Co., Ltd.. In their own names, insiders own ₩17b worth of stock in the ₩1.4t company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 49% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 37%, of the Dongjin Semichem stock. 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. To that end, you should be aware of the 1 warning sign we've spotted with Dongjin Semichem .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.