Foster Electric Company, Limited's (TSE:6794) market cap touched JP¥58b last week, benefiting both retail investors who own 44% as well as institutions

Key Insights

• The considerable ownership by retail investors in Foster Electric Company indicates that they collectively have a greater say in management and business strategy
• A total of 14 investors have a majority stake in the company with 52% ownership
• Institutional ownership in Foster Electric Company is 41%

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To get a sense of who is truly in control of Foster Electric Company, Limited (TSE:6794), it is important to understand the ownership structure of the business. With 44% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Retail investors gained the most after market cap touched JP¥58b last week, while institutions who own 41% also benefitted.

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

View our latest analysis for Foster Electric Company

What Does The Institutional Ownership Tell Us About Foster Electric Company?

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 Foster Electric 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. 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 Foster Electric Company's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Foster Electric Company. Looking at our data, we can see that the largest shareholder is Axium Capital Pte. Ltd. with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.8% and 4.2%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 14 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Foster Electric Company

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 see that insiders own shares in Foster Electric Company, Limited. As individuals, the insiders collectively own JP¥2.1b worth of the JP¥58b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 12%, 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:

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. Be aware that Foster Electric Company is showing 1 warning sign in our investment analysis , you should know about...

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.