State or government own 38% of Japan Tobacco Inc. (TSE:2914) shares but individual investors control 41% of the company

Key Insights

• Significant control over Japan Tobacco by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 8 shareholders
• Institutional ownership in Japan Tobacco is 20%

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Every investor in Japan Tobacco Inc. (TSE:2914) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

State or government, on the other hand, account for 38% of the company's stockholders.

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

View our latest analysis for Japan Tobacco

What Does The Institutional Ownership Tell Us About Japan Tobacco?

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 Japan Tobacco. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Japan Tobacco's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Japan Tobacco. Ministry of Finance Japan is currently the company's largest shareholder with 38% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.0% and 2.6%, of the shares outstanding, respectively.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Japan Tobacco

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 most recent data indicates that insiders own less than 1% of Japan Tobacco Inc.. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own JP¥2.4b of stock. 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

The general public, who are usually individual investors, hold a 41% stake in Japan Tobacco. 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.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Japan Tobacco .

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.