An excellent week for Shibaura Machine Co.,Ltd.'s (TSE:6104) institutional owners who own 49% as one-year returns inch higher

Key Insights

• Given the large stake in the stock by institutions, Shibaura MachineLtd's stock price might be vulnerable to their trading decisions
• A total of 21 investors have a majority stake in the company with 50% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

We've discovered 2 warning signs about Shibaura MachineLtd. View them for free.

A look at the shareholders of Shibaura Machine Co.,Ltd. (TSE:6104) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 12% last week. One-year return to shareholders is currently 0.6% and last week’s gain was the icing on the cake.

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

Check out our latest analysis for Shibaura MachineLtd

What Does The Institutional Ownership Tell Us About Shibaura MachineLtd?

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.

As you can see, institutional investors have a fair amount of stake in Shibaura MachineLtd. 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. 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 Shibaura MachineLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shibaura MachineLtd. Nomura Holdings Inc, Securities & Investment Arm is currently the largest shareholder, with 4.8% of shares outstanding. For context, the second largest shareholder holds about 4.6% of the shares outstanding, followed by an ownership of 3.6% by the third-largest shareholder.

After doing some more digging, we found that the top 21 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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

Insider Ownership Of Shibaura MachineLtd

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data suggests that insiders own under 1% of Shibaura Machine Co.,Ltd. in their own names. It appears that the board holds about JP¥125m worth of stock. This compares to a market capitalization of JP¥80b. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shibaura MachineLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Shibaura MachineLtd (of which 1 is concerning!) you should know about.

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.