If you want to know who really controls Nakamichi Leasing Co., Ltd. (SPSE:8594), then you’ll have to look at the makeup of its share registry. 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.
Nakamichi Leasing is not a large company by global standards. It has a market capitalization of JP¥3.1b, which means it wouldn’t have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about Nakamichi Leasing.
What Does The Institutional Ownership Tell Us About Nakamichi Leasing?
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.
Nakamichi Leasing already has institutions on the share registry. Indeed, they own 42% of the company. 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. 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 Nakamichi Leasing’s earnings history, below. Of course, the future is what really matters.
Hedge funds don’t have many shares in Nakamichi Leasing. Our data suggests that Hiroshi Seki, who is also the company’s President, holds the most number of shares at 23%. When an insider holds a sizeable amount of a company’s stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. The second and third largest shareholders are North Pacific Bank, Ltd., Asset Management Arm and Fuyo General Lease Co. Ltd, Asset Management Arm, holding 19% and 13%, respectively.
Further, we found that the top 3 shareholders have a combined ownership of 55% in the company, meaning that they are powerful enough to influence the decisions of the company.
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 Nakamichi Leasing
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.
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 maintain a significant holding in Nakamichi Leasing Co., Ltd.. Insiders have a JP¥876m stake in this JP¥3.1b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
With a 28% ownership, the general public have some degree of sway over 8594. 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.
It’s always worth thinking about the different groups who own shares in a company. But to understand Nakamichi Leasing better, we need to consider many other factors. Be aware that Nakamichi Leasing is showing 2 warning signs in our investment analysis , and 1 of those is concerning…
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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