Insource Co., Ltd.'s (TSE:6200) largest shareholder, CEO Takayuki Funahashi sees holdings value fall by 8.8% following recent drop

Key Insights

• Insource's significant insider ownership suggests inherent interests in company's expansion
• A total of 4 investors have a majority stake in the company with 54% ownership
• Institutions own 34% of Insource

Every investor in Insource Co., Ltd. (TSE:6200) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 41% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 8.8% decline in share price, insiders suffered the most losses.

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

Check out our latest analysis for Insource

What Does The Institutional Ownership Tell Us About Insource?

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.

Insource already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Insource's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Insource. Looking at our data, we can see that the largest shareholder is the CEO Takayuki Funahashi with 37% of shares outstanding. Newton Investment Management Japan Ltd is the second largest shareholder owning 6.8% of common stock, and Asset Management One Co., Ltd. holds about 5.5% of the company stock.

On looking further, we found that 54% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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

Insider Ownership Of Insource

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 insiders maintain a significant holding in Insource Co., Ltd.. It has a market capitalization of just JP¥83b, and insiders have JP¥34b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Insource. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Insource better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.