Following recent decline, KCC Corporation's (KRX:002380) top shareholder CEO Mong-Jin Chung sees holdings value drop by 5.2%
Key Insights
- Significant insider control over KCC implies vested interests in company growth
- 54% of the business is held by the top 4 shareholders
- 30% of KCC is held by Institutions
To get a sense of who is truly in control of KCC Corporation (KRX:002380), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As market cap fell to ₩1.9t last week, insiders 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 KCC.
Check out our latest analysis for KCC
What Does The Institutional Ownership Tell Us About KCC?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
KCC 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. 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 KCC, (below). Of course, keep in mind that there are other factors to consider, too.
KCC is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Mong-Jin Chung with 27% of shares outstanding. National Pension Service is the second largest shareholder owning 15% of common stock, and Mong Nyul Chung holds about 7.6% of the company stock.
To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of KCC
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 information suggests that insiders maintain a significant holding in KCC Corporation. It has a market capitalization of just ₩1.9t, and insiders have ₩735b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
The general public, who are usually individual investors, hold a 31% stake in KCC. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
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 example, we've discovered 2 warning signs for KCC (1 shouldn't be ignored!) that you should be aware of before investing here.
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.
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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.