Insiders are the top stockholders in NIHON CHOUZAI Co.,Ltd. (TSE:3341), and the recent 10% drop might have disappointed them

Key Insights

• Insiders appear to have a vested interest in NIHON CHOUZAILtd's growth, as seen by their sizeable ownership
• 50% of the business is held by the top 2 shareholders
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of NIHON CHOUZAI Co.,Ltd. (TSE:3341), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 10%.

In the chart below, we zoom in on the different ownership groups of NIHON CHOUZAILtd.

View our latest analysis for NIHON CHOUZAILtd

What Does The Institutional Ownership Tell Us About NIHON CHOUZAILtd?

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 NIHON CHOUZAILtd. 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 NIHON CHOUZAILtd, (below). Of course, keep in mind that there are other factors to consider, too.

NIHON CHOUZAILtd is not owned by hedge funds. Hiroshi Mitsuhara is currently the largest shareholder, with 28% of shares outstanding. Yosuke Mitsuhara is the second largest shareholder owning 22% of common stock, and Max Planning Y.K. holds about 7.5% of the company stock. Yosuke Mitsuhara, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

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 NIHON CHOUZAILtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our information suggests that insiders own more than half of NIHON CHOUZAI Co.,Ltd.. This gives them effective control of the company. That means they own JP¥22b worth of shares in the JP¥41b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 27% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 7.5%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that NIHON CHOUZAILtd is showing 4 warning signs in our investment analysis , 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.