Toenec Corporation's (TSE:1946) largest shareholders are public companies who were rewarded as market cap surged JP¥10b last week

Key Insights

• Significant control over Toenec by public companies implies that the general public has more power to influence management and governance-related decisions
• 53% of the company is held by a single shareholder (Chubu Electric Power Company, Incorporated)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Toenec Corporation (TSE:1946), then you'll have to look at the makeup of its share registry. With 53% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies were the biggest beneficiaries of last week’s 9.5% gain.

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

See our latest analysis for Toenec

What Does The Institutional Ownership Tell Us About Toenec?

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 Toenec 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. 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 Toenec'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 Toenec. Chubu Electric Power Company, Incorporated is currently the largest shareholder, with 53% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 6.1% and 3.3% of the shares outstanding respectively, Toenec Corporation, ESOP and Toenec Corp. Mutual Prosperity Association are the second and third largest shareholders.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Toenec

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. 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 Toenec Corporation. It appears that the board holds about JP¥141m worth of stock. This compares to a market capitalization of JP¥116b. 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

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Toenec. 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 53% of Toenec 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Toenec better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Toenec (of which 1 is concerning!) you should know about.

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.

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