Institutions along with individual investors who hold considerable shares inSWCC Corporation (TSE:5805) come under pressure; lose 22% of holdings value

Key Insights

• SWCC's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 48% ownership
• 46% of SWCC is held by Institutions

Every investor in SWCC Corporation (TSE:5805) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 22% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 46% stock also took a hit.

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

See our latest analysis for SWCC

What Does The Institutional Ownership Tell Us About SWCC?

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.

SWCC already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 SWCC's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in SWCC. Nikko Asset Management Co., Ltd. is currently the largest shareholder, with 4.7% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.3% and 4.3% of the stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of SWCC

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 less than 1% of SWCC Corporation. It appears that the board holds about JP¥165m worth of stock. This compares to a market capitalization of JP¥103b. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 51% of SWCC. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

It appears to us that public companies own 3.3% of SWCC. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that SWCC is showing 2 warning signs in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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