Retail investors who hold 52% of Tomoe Corporation (TSE:1921) gained 12%, institutions profited as well

Key Insights

• The considerable ownership by retail investors in Tomoe indicates that they collectively have a greater say in management and business strategy
• 48% of the business is held by the top 25 shareholders
• Institutions own 21% of Tomoe

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To get a sense of who is truly in control of Tomoe Corporation (TSE:1921), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 12% increase in the stock price last week, retail investors profited the most, but institutions who own 21% stock also stood to gain from the increase.

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

View our latest analysis for Tomoe

What Does The Institutional Ownership Tell Us About Tomoe?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Tomoe already has institutions on the share registry. Indeed, they own a respectable stake in 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Tomoe, (below). Of course, keep in mind that there are other factors to consider, too.

Tomoe is not owned by hedge funds. The company's largest shareholder is Ichiro Nozawa Scholarship Society Foundation, Endowment Arm, with ownership of 6.6%. The second and third largest shareholders are Nozawa Corporation and Sumitomo Mitsui Financial Group Inc., Asset Management Arm, with an equal amount of shares to their name at 5.5%.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Tomoe

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 Tomoe Corporation insiders own under 1% of the company. It appears that the board holds about JP¥240m worth of stock. This compares to a market capitalization of JP¥56b. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 52% of Tomoe shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

We can see that public companies hold 20% of the Tomoe shares on issue. 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:

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. Take risks for example - Tomoe has 1 warning sign we think you should be aware of.

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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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.