Institutional investors must be pleased after a 3.1% gain last week that adds to Toyo Tire Corporation's (TSE:5105) one-year returns

Key Insights

• Significantly high institutional ownership implies Toyo Tire's stock price is sensitive to their trading actions
• The top 13 shareholders own 51% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Our free stock report includes 2 warning signs investors should be aware of before investing in Toyo Tire. Read for free now.

If you want to know who really controls Toyo Tire Corporation (TSE:5105), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 38% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And things are looking up for institutional investors after the company gained JP¥13b in market cap last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 0.3%.

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

See our latest analysis for Toyo Tire

What Does The Institutional Ownership Tell Us About Toyo Tire?

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.

As you can see, institutional investors have a fair amount of stake in Toyo Tire. 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 Toyo Tire's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Toyo Tire. Looking at our data, we can see that the largest shareholder is Mitsubishi Corporation with 20% of shares outstanding. With 4.9% and 4.0% of the shares outstanding respectively, Orbis Investment Management Limited and Fidelity International Ltd are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Toyo Tire

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Toyo Tire Corporation insiders own under 1% of the company. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around JP¥232m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Toyo Tire. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 23% of Toyo Tire. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Toyo Tire better, we need to consider many other factors. Be aware that Toyo Tire is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.