Tess Holdings Co.,Ltd.'s (TSE:5074) most bullish insider, Top Key Executive Hideo Ishiwaki must be pleased with the recent 20% gain

Key Insights

• Significant insider control over Tess HoldingsLtd implies vested interests in company growth
• The top 7 shareholders own 50% of the company
• Institutional ownership in Tess HoldingsLtd is 11%

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Every investor in Tess Holdings Co.,Ltd. (TSE:5074) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by JP¥4.4b last week.

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

See our latest analysis for Tess HoldingsLtd

What Does The Institutional Ownership Tell Us About Tess HoldingsLtd?

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.

As you can see, institutional investors have a fair amount of stake in Tess HoldingsLtd. 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 Tess HoldingsLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Tess HoldingsLtd is not owned by hedge funds. From our data, we infer that the largest shareholder is Hideo Ishiwaki (who also holds the title of Top Key Executive) with 14% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 8.3% and 8.2% of the shares outstanding respectively, Kazuki Yamamoto and Toshihiro Takasaki are the second and third largest shareholders. 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 did some more digging and found that 7 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Tess HoldingsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own a reasonable proportion of Tess Holdings Co.,Ltd.. It has a market capitalization of just JP¥27b, and insiders have JP¥12b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 38% stake in the company, and hence can't easily be ignored. 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

Public companies currently own 5.0% of Tess HoldingsLtd stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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 example, we've discovered 3 warning signs for Tess HoldingsLtd (2 are concerning!) that you should be aware of before investing here.

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.