How Much Of GMO Financial Holdings, Inc. (TYO:7177) Do Institutions Own?

A look at the shareholders of GMO Financial Holdings, Inc. (TYO:7177) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of JP¥88b, GMO Financial Holdings is a decent size, so it is probably on the radar of institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about GMO Financial Holdings.

Check out our latest analysis for GMO Financial Holdings

What Does The Institutional Ownership Tell Us About GMO Financial Holdings?

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.

We can see that GMO Financial Holdings does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 GMO Financial Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in GMO Financial Holdings. Our data shows that GMO Internet, Inc. is the largest shareholder with 63% of shares outstanding. This implies that they have majority interest control of the future of the company. With 5.3% and 1.5% of the shares outstanding respectively, Daiwa Securities Group Inc. and Janus Henderson Group plc are the second and third largest shareholders.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of GMO Financial Holdings

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

I can report that insiders do own shares in GMO Financial Holdings, Inc.. In their own names, insiders own JP¥1.8b worth of stock in the JP¥88b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 24% ownership, the general public have some degree of sway over GMO Financial Holdings. 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.

Public Company Ownership

Public companies currently own 68% of GMO Financial Holdings stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand GMO Financial Holdings better, we need to consider many other factors. For instance, we've identified 2 warning signs for GMO Financial Holdings (1 is a bit concerning) that 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. 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.
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