Yutaka Giken Co.,Ltd.'s (TSE:7229) last week's 19% decline must have disappointed public companies who have a significant stake

Key Insights

• The considerable ownership by public companies in Yutaka GikenLtd indicates that they collectively have a greater say in management and business strategy
• 70% of the company is held by a single shareholder (Honda Motor Co., Ltd.)
• Institutional ownership in Yutaka GikenLtd is 10%

A look at the shareholders of Yutaka Giken Co.,Ltd. (TSE:7229) can tell us which group is most powerful. We can see that public companies own the lion's share in the company with 70% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 19% decline in share price, public companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Yutaka GikenLtd.

Check out our latest analysis for Yutaka GikenLtd

What Does The Institutional Ownership Tell Us About Yutaka GikenLtd?

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 Yutaka GikenLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Yutaka GikenLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Yutaka GikenLtd. The company's largest shareholder is Honda Motor Co., Ltd., with ownership of 70%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 4.2% and 1.9% of the shares outstanding respectively, FMR LLC and MUFG Bank, Ltd.,Investment Banking Arm 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 Yutaka GikenLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our most recent data indicates that insiders own less than 1% of Yutaka Giken Co.,Ltd.. It seems the board members have no more than JP¥112m worth of shares in the JP¥25b company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yutaka GikenLtd. 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 70% of Yutaka GikenLtd stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Yutaka GikenLtd .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com