Painful week for retail investors invested in Sanki Engineering Co., Ltd. (TSE:1961) after 4.1% drop, institutions also suffered losses

Key Insights

• Significant control over Sanki Engineering by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 18 investors have a majority stake in the company with 50% ownership
• Institutional ownership in Sanki Engineering is 42%

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To get a sense of who is truly in control of Sanki Engineering Co., Ltd. (TSE:1961), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 48% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 4.1% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 42% stock also took a hit.

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

View our latest analysis for Sanki Engineering

What Does The Institutional Ownership Tell Us About Sanki Engineering?

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.

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

Hedge funds don't have many shares in Sanki Engineering. Nissay Asset Management Corporation is currently the company's largest shareholder with 10% of shares outstanding. For context, the second largest shareholder holds about 10.0% of the shares outstanding, followed by an ownership of 6.2% by the third-largest shareholder.

After doing some more digging, we found that the top 18 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Sanki Engineering

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own less than 1% of Sanki Engineering Co., Ltd.. Keep in mind that it's a big company, and the insiders own JP¥1.7b worth of shares. The absolute value might be more important than the proportional share. 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

The general public-- including retail investors -- own 48% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sanki Engineering better, we need to consider many other factors. For instance, we've identified 1 warning sign for Sanki Engineering that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.