In the wake of MINKABU THE INFONOID, Inc.'s (TSE:4436) latest JP¥2.8b market cap drop, institutional owners may be forced to take severe actions

Key Insights

• Significantly high institutional ownership implies MINKABU THE INFONOID's stock price is sensitive to their trading actions
• The top 8 shareholders own 55% of the company
• Insider ownership in MINKABU THE INFONOID is 16%

If you want to know who really controls MINKABU THE INFONOID, Inc. (TSE:4436), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutional investors saw their holdings value drop by 13% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 31% for shareholders. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the downtrend continues, institutions may face pressures to sell MINKABU THE INFONOID, which might have negative implications on individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about MINKABU THE INFONOID.

See our latest analysis for MINKABU THE INFONOID

What Does The Institutional Ownership Tell Us About MINKABU THE INFONOID?

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 MINKABU THE INFONOID 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 MINKABU THE INFONOID, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in MINKABU THE INFONOID. Looking at our data, we can see that the largest shareholder is the CEO Ken Uryu with 8.3% of shares outstanding. The second and third largest shareholders are Newton Investment Management Japan Ltd and SBI Holdings Inc., Asset Management Arm, with an equal amount of shares to their name at 8.3%.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 MINKABU THE INFONOID

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 maintain a significant holding in MINKABU THE INFONOID, Inc.. Insiders own JP¥2.9b worth of shares in the JP¥18b company. 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 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over MINKABU THE INFONOID. 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 8.9%, 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.

Public Company Ownership

It appears to us that public companies own 6.5% of MINKABU THE INFONOID. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - MINKABU THE INFONOID has 4 warning signs (and 1 which is significant) we think you should know about.

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.