Individual investors invested in ENF Technology Co., Ltd. (KOSDAQ:102710) copped the brunt of last week's ₩33b market cap decline

Simply Wall St · 10/18 21:59

Key Insights

  • The considerable ownership by individual investors in ENF Technology indicates that they collectively have a greater say in management and business strategy
  • 46% of the business is held by the top 18 shareholders
  • 13% of ENF Technology is held by Institutions

To get a sense of who is truly in control of ENF Technology Co., Ltd. (KOSDAQ:102710), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, individual investors as a group endured the highest losses last week after market cap fell by ₩33b.

Let's delve deeper into each type of owner of ENF Technology, beginning with the chart below.

View our latest analysis for ENF Technology

ownership-breakdown
KOSDAQ:A102710 Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About ENF Technology?

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.

We can see that ENF Technology does have institutional investors; and they hold a good portion of the company's stock. 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. 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 ENF Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
KOSDAQ:A102710 Earnings and Revenue Growth October 18th 2024

We note that hedge funds don't have a meaningful investment in ENF Technology. Our data shows that Korea Alcohol Industrial Co., Ltd. is the largest shareholder with 26% of shares outstanding. For context, the second largest shareholder holds about 7.0% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder. Yong-Seok Chi, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A deeper look at our ownership data shows that the top 18 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 ENF Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can see that insiders own shares in ENF Technology Co., Ltd.. It has a market capitalization of just ₩262b, and insiders have ₩19b worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 54% of ENF Technology. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Public Company Ownership

It appears to us that public companies own 26% of ENF Technology. 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. Take risks for example - ENF Technology has 2 warning signs (and 1 which can't be ignored) we think you should know about.

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.