SBI Leasing Services Co., Ltd.'s (TSE:5834) last week's 15% decline must have disappointed public companies who have a significant stake

Key Insights

• Significant control over SBI Leasing Services by public companies implies that the general public has more power to influence management and governance-related decisions
• SBI Holdings, Inc. owns 63% of the company
• Institutions own 10% of SBI Leasing Services

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To get a sense of who is truly in control of SBI Leasing Services Co., Ltd. (TSE:5834), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 63% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, public companies endured the biggest losses as the stock fell by 15%.

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

Check out our latest analysis for SBI Leasing Services

What Does The Institutional Ownership Tell Us About SBI Leasing Services?

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.

We can see that SBI Leasing Services 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of SBI Leasing Services, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in SBI Leasing Services. SBI Holdings, Inc. is currently the company's largest shareholder with 63% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 3.5% and 2.1% of the shares outstanding respectively, Japan Securities Finance Co. Ltd., Asset Management Arm and Auto Panther Co., Ltd. are the second and third largest shareholders.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of SBI Leasing Services

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Shareholders would probably be interested to learn that insiders own shares in SBI Leasing Services Co., Ltd.. As individuals, the insiders collectively own JP¥729m worth of the JP¥23b company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SBI Leasing Services. 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

We can see that public companies hold 63% of the SBI Leasing Services shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 SBI Leasing Services is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.