SK Discovery Co., Ltd.'s (KRX:006120) most bullish insider, CEO Chang-Won Chey must be pleased with the recent 7.3% gain

Key Insights

• Insiders appear to have a vested interest in SK Discovery's growth, as seen by their sizeable ownership
• Chang-Won Chey owns 50% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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A look at the shareholders of SK Discovery Co., Ltd. (KRX:006120) can tell us which group is most powerful. With 50% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit ₩1.1t market cap following a 7.3% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about SK Discovery.

See our latest analysis for SK Discovery

What Does The Institutional Ownership Tell Us About SK Discovery?

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.

We can see that SK Discovery does have institutional investors; and they hold a good portion of the company's stock. 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 SK Discovery's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in SK Discovery. With a 50% stake, CEO Chang-Won Chey is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. With 4.3% and 1.7% of the shares outstanding respectively, National Pension Service and The Vanguard Group, Inc. are the second and third largest shareholders.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of SK Discovery

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders own more than half of SK Discovery Co., Ltd.. This gives them effective control of the company. That means they own ₩549b worth of shares in the ₩1.1t company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SK Discovery. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SK Discovery better, we need to consider many other factors. For example, we've discovered 4 warning signs for SK Discovery (2 are a bit unpleasant!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.