Institutional investors in Kumagai Gumi Co.,Ltd. (TSE:1861) lost 3.9% last week but have reaped the benefits of longer-term growth

Key Insights

• Institutions' substantial holdings in Kumagai GumiLtd implies that they have significant influence over the company's share price
• The top 5 shareholders own 50% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

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Every investor in Kumagai Gumi Co.,Ltd. (TSE:1861) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 33% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 3.9% last week. However, the 71% one-year return to shareholders might have softened the blow. We would assume however, that they would be on the lookout for weakness in the future.

Let's delve deeper into each type of owner of Kumagai GumiLtd, beginning with the chart below.

See our latest analysis for Kumagai GumiLtd

What Does The Institutional Ownership Tell Us About Kumagai GumiLtd?

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 Kumagai GumiLtd. 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 Kumagai GumiLtd's earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 10% of Kumagai GumiLtd. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Sumitomo Forestry Co., Ltd. is currently the company's largest shareholder with 22% of shares outstanding. Oasis Management Company Ltd. is the second largest shareholder owning 10% of common stock, and Amova Asset Management Co., Ltd. holds about 7.4% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Kumagai GumiLtd

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. 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 most recent data indicates that insiders own less than 1% of Kumagai Gumi Co.,Ltd.. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own JP¥137m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kumagai GumiLtd. 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

Public companies currently own 22% of Kumagai GumiLtd stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Kumagai GumiLtd you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.