Mercuria Holdings Co., Ltd.'s (TSE:7347) biggest owners are retail investors who got richer after stock soared 16% last week

Key Insights

• Significant control over Mercuria Holdings by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 52% of the company
• Institutions own 15% of Mercuria Holdings

Every investor in Mercuria Holdings Co., Ltd. (TSE:7347) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 24% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by JP¥2.8b last week.

In the chart below, we zoom in on the different ownership groups of Mercuria Holdings.

View our latest analysis for Mercuria Holdings

What Does The Institutional Ownership Tell Us About Mercuria Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Mercuria Holdings. 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 Mercuria Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Mercuria Holdings. Our data shows that Development Bank of Japan Inc. is the largest shareholder with 22% of shares outstanding. For context, the second largest shareholder holds about 18% of the shares outstanding, followed by an ownership of 13% by the third-largest shareholder. In addition, we found that Toshihiro Toyoshima, the CEO has 5.4% of the shares allocated to their name.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Mercuria Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 report that insiders do own shares in Mercuria Holdings Co., Ltd.. As individuals, the insiders collectively own JP¥1.6b worth of the JP¥20b company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Mercuria 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.

Private Equity Ownership

Private equity firms hold a 18% stake in Mercuria Holdings. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

We can see that Private Companies own 22%, of the shares on issue. 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

Public companies currently own 13% of Mercuria Holdings stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Mercuria Holdings better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Mercuria Holdings (of which 1 doesn't sit too well with us!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.