Kinden Corporation's (TSE:1944) stock price dropped 3.5% last week; individual investors would not be happy

Key Insights

• Significant control over Kinden by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 6 investors have a majority stake in the company with 52% ownership
• 20% of Kinden is held by Institutions

A look at the shareholders of Kinden Corporation (TSE:1944) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, individual investors as a group endured the highest losses last week after market cap fell by JP¥23b.

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

View our latest analysis for Kinden

What Does The Institutional Ownership Tell Us About Kinden?

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 Kinden does have institutional investors; and they hold a good portion of the company's stock. 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 Kinden's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Kinden. The company's largest shareholder is The Kansai Electric Power Company, Incorporated, with ownership of 37%. Kinden Corporation, ESOP is the second largest shareholder owning 4.6% of common stock, and Silchester International Investors LLP holds about 4.0% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Kinden

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 information suggests that Kinden 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¥929m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kinden. 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.

Public Company Ownership

It appears to us that public companies own 37% of Kinden. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Kinden has 1 warning sign we think you should be aware of.

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.