Dongwon Industries Co., Ltd.'s (KRX:006040) market cap increased by ₩130b, insiders receive a 69% cut
Key Insights
- Insiders appear to have a vested interest in Dongwon Industries' growth, as seen by their sizeable ownership
- 55% of the company is held by a single shareholder (Nam-Jung Kim)
- Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
A look at the shareholders of Dongwon Industries Co., Ltd. (KRX:006040) can tell us which group is most powerful. The group holding the most number of shares in the company, around 69% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, insiders were the biggest beneficiaries of last week’s 6.9% gain.
In the chart below, we zoom in on the different ownership groups of Dongwon Industries.
View our latest analysis for Dongwon Industries
What Does The Institutional Ownership Tell Us About Dongwon Industries?
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.
As you can see, institutional investors have a fair amount of stake in Dongwon Industries. 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. 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 Dongwon Industries' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Dongwon Industries. Looking at our data, we can see that the largest shareholder is Nam-Jung Kim with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 14% and 3.9% of the stock.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Dongwon Industries
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 most recent data indicates that insiders own the majority of Dongwon Industries Co., Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of ₩2.0t, that means insiders have a whopping ₩1.4t worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.
General Public Ownership
The general public, who are usually individual investors, hold a 25% stake in Dongwon Industries. 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 instance, we've identified 3 warning signs for Dongwon Industries (2 are concerning) that you should be aware of.
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.