Individual investors in Gakujo Co., Ltd. (TSE:2301) are its biggest bettors, and their bets paid off as stock gained 12% last week

Key Insights

• Gakujo's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 8 shareholders own 50% of the company
• Institutions own 25% of Gakujo

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A look at the shareholders of Gakujo Co., Ltd. (TSE:2301) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 37% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors collectively scored the highest last week as the company hit JP¥24b market cap following a 12% gain in the stock.

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

See our latest analysis for Gakujo

What Does The Institutional Ownership Tell Us About Gakujo?

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.

Gakujo 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. 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 Gakujo'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 Gakujo. Ambitious Co., Ltd. is currently the largest shareholder, with 17% of shares outstanding. The Asahi Shimbun Company is the second largest shareholder owning 12% of common stock, and FMR LLC holds about 4.5% of the company stock. Furthermore, CEO Taishi Nakai is the owner of 3.3% of the company's shares.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Gakujo

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. 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.

We can report that insiders do own shares in Gakujo Co., Ltd.. As individuals, the insiders collectively own JP¥1.0b worth of the JP¥24b company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

Our data indicates that Private Companies hold 30%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.