NIHON CHOUZAI Co.,Ltd. (TSE:3341) adds JP¥6.5b in market cap and insiders have a 43% stake in that gain

Key Insights

• NIHON CHOUZAILtd's significant insider ownership suggests inherent interests in company's expansion
• A total of 3 investors have a majority stake in the company with 58% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

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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. The group holding the most number of shares in the company, around 43% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit JP¥52b market cap following a 14% gain in the stock.

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

Check out 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.

NIHON CHOUZAILtd 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 NIHON CHOUZAILtd's historic earnings and revenue below, but keep in mind there's always more to the story.

NIHON CHOUZAILtd is not owned by hedge funds. Yosuke Mitsuhara is currently the largest shareholder, with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 20% and 16% of the stock. Hiroshi Mitsuhara, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 58% 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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of NIHON CHOUZAILtd

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

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 most recent data indicates that insiders own a reasonable proportion of NIHON CHOUZAI Co.,Ltd.. Insiders have a JP¥22b stake in this JP¥52b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over NIHON CHOUZAILtd. 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 20%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand NIHON CHOUZAILtd better, we need to consider many other factors. Take risks for example - NIHON CHOUZAILtd has 1 warning sign we think you should be aware of.

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.