Institutions own 36% of M3, Inc. (TSE:2413) shares but public companies control 37% of the company

Key Insights

• Significant control over M3 by public companies implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 51% of the company
• 36% of M3 is held by Institutions

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To get a sense of who is truly in control of M3, Inc. (TSE:2413), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 37% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

Institutions, on the other hand, account for 36% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

Let's take a closer look to see what the different types of shareholders can tell us about M3.

View our latest analysis for M3

What Does The Institutional Ownership Tell Us About M3?

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.

M3 already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 M3, (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 M3. Our data shows that Sony Group Corporation is the largest shareholder with 34% of shares outstanding. With 5.3% and 4.3% of the shares outstanding respectively, BlackRock, Inc. and Nomura Asset Management Co., Ltd. are the second and third largest shareholders. Additionally, the company's CEO Itaru Tanimura directly holds 2.9% of the total shares outstanding.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 M3

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 see that insiders own shares in M3, Inc.. It is a very large company, and board members collectively own JP¥45b worth of shares (at current prices). It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in M3. 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.

Public Company Ownership

We can see that public companies hold 37% of the M3 shares on issue. 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 M3 better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with M3 , and understanding them should be part of your investment process.

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.