Makita Corporation's (TSE:6586) market cap touched JP¥1.1t last week, benefiting both individual investors who own 48% as well as institutions

Key Insights

• Significant control over Makita by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 44% of the company
• Institutions own 46% of Makita

Our free stock report includes 1 warning sign investors should be aware of before investing in Makita. Read for free now.

If you want to know who really controls Makita Corporation (TSE:6586), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 6.6% increase in the stock price last week, individual investors profited the most, but institutions who own 46% stock also stood to gain from the increase.

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

View our latest analysis for Makita

What Does The Institutional Ownership Tell Us About Makita?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Makita does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Makita's earnings history below. Of course, the future is what really matters.

Makita is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 5.8% of shares outstanding. Sumitomo Mitsui Trust Asset Management Co., Ltd. is the second largest shareholder owning 3.7% of common stock, and The Vanguard Group, Inc. holds about 3.5% of the company stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Makita

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.

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 Makita Corporation. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around JP¥2.5b worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 48% stake in Makita. 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

It appears to us that public companies own 3.2% of Makita. 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. Take risks for example - Makita has 1 warning sign we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.