Hanwha Corporation's (KRX:000880) stock price dropped 10% last week; retail investors would not be happy
Key Insights
- The considerable ownership by retail investors in Hanwha indicates that they collectively have a greater say in management and business strategy
- The top 3 shareholders own 52% of the company
- Insider ownership in Hanwha is 29%
Every investor in Hanwha Corporation (KRX:000880) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While insiders who own 29% came under pressure after market cap dropped to ₩5.6t last week,retail investors took the most losses.
Let's delve deeper into each type of owner of Hanwha, beginning with the chart below.
View our latest analysis for Hanwha
What Does The Institutional Ownership Tell Us About Hanwha?
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.
Hanwha 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 Hanwha, (below). Of course, keep in mind that there are other factors to consider, too.
Hanwha is not owned by hedge funds. The company's largest shareholder is Hanwha Energy Corporation, with ownership of 24%. Seung-Yeon Kim is the second largest shareholder owning 18% of common stock, and Dong Kwan Kim holds about 11% of the company stock. Two of the top three shareholders happen to be Chief Executive Officer and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Hanwha
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
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.
Our most recent data indicates that insiders own a reasonable proportion of Hanwha Corporation. It is very interesting to see that insiders have a meaningful ₩1.6t stake in this ₩5.6t business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 34% stake in Hanwha. 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 24%, of the Hanwha stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Hanwha better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Hanwha you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.