ISU Specialty Chemical Co., Ltd.'s (KRX:457190) market cap dropped ₩254b last week; Retail investors bore the brunt
Key Insights
- Significant control over ISU Specialty Chemical by retail investors implies that the general public has more power to influence management and governance-related decisions
- A total of 25 investors have a majority stake in the company with 40% ownership
- Insider ownership in ISU Specialty Chemical is 10%
Every investor in ISU Specialty Chemical Co., Ltd. (KRX:457190) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And following last week's 12% decline in share price, retail investors suffered the most losses.
Let's delve deeper into each type of owner of ISU Specialty Chemical, beginning with the chart below.
View our latest analysis for ISU Specialty Chemical
What Does The Institutional Ownership Tell Us About ISU Specialty Chemical?
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.
Less than 5% of ISU Specialty Chemical is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.
We note that hedge funds don't have a meaningful investment in ISU Specialty Chemical. The company's largest shareholder is Isu Corp., with ownership of 25%. In comparison, the second and third largest shareholders hold about 7.5% and 2.6% of the stock.
A deeper look at our ownership data shows that the top 25 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. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of ISU Specialty Chemical
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.
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.
It seems insiders own a significant proportion of ISU Specialty Chemical Co., Ltd.. It is very interesting to see that insiders have a meaningful ₩186b stake in this ₩1.8t 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, mostly comprising of individual investors, collectively holds 60% of ISU Specialty Chemical shares. 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.
Private Company Ownership
Our data indicates that Private Companies hold 25%, of the company's shares. 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. Case in point: We've spotted 3 warning signs for ISU Specialty Chemical you should be aware of, and 1 of them makes us a bit uncomfortable.
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.