While institutions invested in Maruha Nichiro Corporation (TSE:1333) benefited from last week's 5.5% gain, individual investors stood to gain the most

Key Insights

• The considerable ownership by individual investors in Maruha Nichiro indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 40% of the company
• Institutional ownership in Maruha Nichiro is 30%

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A look at the shareholders of Maruha Nichiro Corporation (TSE:1333) can tell us which group is most powerful. The group holding the most number of shares in the company, around 59% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 5.5% increase in the stock price last week, individual investors profited the most, but institutions who own 30% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Maruha Nichiro.

Check out our latest analysis for Maruha Nichiro

What Does The Institutional Ownership Tell Us About Maruha Nichiro?

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.

We can see that Maruha Nichiro 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Maruha Nichiro's earnings history below. Of course, the future is what really matters.

Maruha Nichiro is not owned by hedge funds. The company's largest shareholder is Daitoh Trading Co.,Ltd., with ownership of 9.8%. For context, the second largest shareholder holds about 3.4% of the shares outstanding, followed by an ownership of 2.6% by the third-largest shareholder.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Maruha Nichiro

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.

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 Maruha Nichiro 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¥137m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 59% stake in Maruha Nichiro, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 9.8%, 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.

Next Steps:

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

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.