Individual investors who hold 45% of Tess Holdings Co.,Ltd. (TSE:5074) gained 10%, insiders profited as well

Key Insights

• Significant control over Tess HoldingsLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• 52% of the business is held by the top 9 shareholders
• Insider ownership in Tess HoldingsLtd is 45%

If you want to know who really controls Tess Holdings Co.,Ltd. (TSE:5074), 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 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched JP¥20b last week, while insiders who own 45% also benefitted.

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

Check out our latest analysis for Tess HoldingsLtd

What Does The Institutional Ownership Tell Us About Tess HoldingsLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Tess HoldingsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Tess HoldingsLtd'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 Tess HoldingsLtd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Tess HoldingsLtd's case, its Top Key Executive, Hideo Ishiwaki, is the largest shareholder, holding 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.3% and 8.2%, of the shares outstanding, respectively. Interestingly, the second and third-largest shareholders also happen to be the Chief Executive Officer and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Tess HoldingsLtd

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Tess Holdings Co.,Ltd.. Insiders have a JP¥8.7b stake in this JP¥20b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tess HoldingsLtd. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Tess HoldingsLtd better, we need to consider many other factors. For instance, we've identified 4 warning signs for Tess HoldingsLtd (1 is a bit unpleasant) that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.