Retail investors who hold 55% of Kawasaki Heavy Industries, Ltd. (TSE:7012) gained 4.0%, institutions profited as well

Key Insights

• Kawasaki Heavy Industries' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 42% ownership
• Institutions own 40% of Kawasaki Heavy Industries

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Every investor in Kawasaki Heavy Industries, Ltd. (TSE:7012) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Retail investors gained the most after market cap touched JP¥1.6t last week, while institutions who own 40% also benefitted.

Let's delve deeper into each type of owner of Kawasaki Heavy Industries, beginning with the chart below.

Check out our latest analysis for Kawasaki Heavy Industries

What Does The Institutional Ownership Tell Us About Kawasaki Heavy Industries?

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.

Kawasaki Heavy Industries already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Kawasaki Heavy Industries, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Kawasaki Heavy Industries. Our data shows that Nomura Asset Management Co., Ltd. is the largest shareholder with 4.6% of shares outstanding. Nikko Asset Management Co., Ltd. is the second largest shareholder owning 4.2% of common stock, and Sumitomo Mitsui Trust Asset Management Co., Ltd. holds about 3.5% of the company stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Kawasaki Heavy Industries

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. 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 information suggests that Kawasaki Heavy Industries, Ltd. insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own JP¥954m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Kawasaki Heavy Industries shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kawasaki Heavy Industries better, we need to consider many other factors. Be aware that Kawasaki Heavy Industries is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

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.