While private companies own 26% of Tokyo Century Corporation (TSE:8439), public companies are its largest shareholders with 41% ownership

Key Insights

• The considerable ownership by public companies in Tokyo Century indicates that they collectively have a greater say in management and business strategy
• 54% of the business is held by the top 3 shareholders
• Institutions own 20% of Tokyo Century

To get a sense of who is truly in control of Tokyo Century Corporation (TSE:8439), it is important to understand the ownership structure of the business. We can see that public companies own the lion's share in the company with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Meanwhile, private companies make up 26% of the company’s shareholders.

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

View our latest analysis for Tokyo Century

What Does The Institutional Ownership Tell Us About Tokyo Century?

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

Tokyo Century is not owned by hedge funds. ITOCHU Corporation is currently the largest shareholder, with 30% of shares outstanding. Chuo-Nittochi Group Co., Ltd. is the second largest shareholder owning 14% of common stock, and Nippon Telegraph and Telephone Corporation holds about 10% of the company stock.

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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Tokyo Century

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.

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.

Our information suggests that Tokyo Century Corporation insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around JP¥658m worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tokyo Century. 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

Our data indicates that Private Companies hold 26%, of the company's shares. 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.

Public Company Ownership

Public companies currently own 41% of Tokyo Century stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Tokyo Century better, we need to consider many other factors. For instance, we've identified 2 warning signs for Tokyo Century (1 shouldn't be ignored) that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.