What Kind Of Shareholders Hold The Majority In Yachiyo Industry Co., Ltd.'s (TYO:7298) Shares?

By
Simply Wall St
Published
May 09, 2021
JASDAQ:7298
Source: Shutterstock

A look at the shareholders of Yachiyo Industry Co., Ltd. (TYO:7298) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Yachiyo Industry is a smaller company with a market capitalization of JP¥16b, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Yachiyo Industry.

See our latest analysis for Yachiyo Industry

ownership-breakdown
JASDAQ:7298 Ownership Breakdown May 10th 2021

What Does The Institutional Ownership Tell Us About Yachiyo Industry?

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.

As you can see, institutional investors have a fair amount of stake in Yachiyo Industry. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Yachiyo Industry's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
JASDAQ:7298 Earnings and Revenue Growth May 10th 2021

We note that hedge funds don't have a meaningful investment in Yachiyo Industry. Honda Motor Co., Ltd. is currently the company's largest shareholder with 51% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 3.7% and 3.2% of the shares outstanding respectively, FMR LLC and Yoshiko Otake are the second and third largest shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Yachiyo Industry

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. 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 Yachiyo Industry Co., Ltd.. As individuals, the insiders collectively own JP¥1.2b worth of the JP¥16b company. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 30% ownership, the general public have some degree of sway over Yachiyo Industry. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

Public companies currently own 51% of Yachiyo Industry stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Yachiyo Industry is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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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