Individual investors who have a significant stake must be disappointed along with institutions after Nichireki Group Co., Ltd.'s (TSE:5011) market cap dropped by JP¥8.4b

Key Insights

• The considerable ownership by individual investors in Nichireki Group indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 12 shareholders
• Institutional ownership in Nichireki Group is 30%

If you want to know who really controls Nichireki Group Co., Ltd. (TSE:5011), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions who own 30% came under pressure after market cap dropped to JP¥71b last week,individual investors took the most losses.

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

View our latest analysis for Nichireki Group

What Does The Institutional Ownership Tell Us About Nichireki Group?

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.

Nichireki Group 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. 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 Nichireki Group's historic earnings and revenue below, but keep in mind there's always more to the story.

It would appear that 17% of Nichireki Group shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is Symphony Financial Partners (Singapore) Pte. Ltd., with ownership of 17%. With 5.5% and 4.5% of the shares outstanding respectively, Sumitomo Mitsui Trust Asset Management Co., Ltd. and Symphony Financial Partners (Singapore) Pte Ltd are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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

Insider Ownership Of Nichireki Group

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.

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 data suggests that insiders own under 1% of Nichireki Group Co., Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It appears that the board holds about JP¥367m worth of stock. This compares to a market capitalization of JP¥71b. 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 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Nichireki Group. 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

It appears to us that public companies own 4.2% of Nichireki Group. 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. For instance, we've identified 1 warning sign for Nichireki Group 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.