Institutions along with individual investors who hold considerable shares inMITSUI E&S Co., Ltd. (TSE:7003) come under pressure; lose 8.4% of holdings value

Key Insights

• Significant control over MITSUI E&S by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 21 investors have a majority stake in the company with 50% ownership
• Institutions own 40% of MITSUI E&S

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If you want to know who really controls MITSUI E&S Co., Ltd. (TSE:7003), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 52% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 8.4% price drop, institutions with their 40% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of MITSUI E&S.

See our latest analysis for MITSUI E&S

What Does The Institutional Ownership Tell Us About MITSUI E&S?

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.

As you can see, institutional investors have a fair amount of stake in MITSUI E&S. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see MITSUI E&S' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in MITSUI E&S. The company's largest shareholder is JP Morgan Asset Management, with ownership of 8.5%. Meanwhile, the second and third largest shareholders, hold 4.5% and 3.8%, of the shares outstanding, respectively.

A closer look at our ownership figures suggests that the top 21 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of MITSUI E&S

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own some shares in MITSUI E&S Co., Ltd.. The insiders have a meaningful stake worth JP¥7.1b. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 52% of MITSUI E&S shares. 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.

Private Company Ownership

We can see that Private Companies own 3.8%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand MITSUI E&S better, we need to consider many other factors. Take risks for example - MITSUI E&S has 3 warning signs (and 1 which doesn't sit too well with us) we think 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.