Individual investors who hold 45% of Meidensha Corporation (TSE:6508) gained 8.1%, institutions profited as well

Key Insights

• Meidensha's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 21 investors have a majority stake in the company with 50% ownership
• 42% of Meidensha is held by Institutions

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

A look at the shareholders of Meidensha Corporation (TSE:6508) can tell us which group is most powerful. 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).

Following a 8.1% increase in the stock price last week, individual investors profited the most, but institutions who own 42% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Meidensha.

See our latest analysis for Meidensha

What Does The Institutional Ownership Tell Us About Meidensha?

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 Meidensha. 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 Meidensha's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Meidensha. Sumitomo Mitsui Trust Asset Management Co., Ltd. is currently the largest shareholder, with 5.9% of shares outstanding. With 5.8% and 5.0% of the shares outstanding respectively, Sumitomo Electric Industries, Ltd. and Mondrian Investment Partners Limited are the second and third largest shareholders.

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.

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

Insider Ownership Of Meidensha

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

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 information suggests that Meidensha Corporation insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own JP¥308m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 45% stake in Meidensha. 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

We can see that public companies hold 8.7% of the Meidensha shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Meidensha , and understanding them should be part of your investment process.

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.