NAVER Corporation's (KRX:035420) market cap touched ₩35t last week, benefiting both retail investors who own 58% as well as institutions
Key Insights
- Significant control over NAVER by retail investors implies that the general public has more power to influence management and governance-related decisions
- The top 25 shareholders own 37% of the company
- Institutions own 38% of NAVER
To get a sense of who is truly in control of NAVER Corporation (KRX:035420), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Retail investors gained the most after market cap touched ₩35t last week, while institutions who own 38% also benefitted.
In the chart below, we zoom in on the different ownership groups of NAVER.
See our latest analysis for NAVER
What Does The Institutional Ownership Tell Us About NAVER?
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.
NAVER 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at NAVER's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in NAVER. Looking at our data, we can see that the largest shareholder is National Pension Service with 9.5% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 6.4% of common stock, and Hae-Jin Lee holds about 4.1% of the company stock. Hae-Jin Lee, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of NAVER
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 see that insiders own shares in NAVER Corporation. Insiders own ₩1.4t worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 58% stake in NAVER, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.