After the recent decline, Medley, Inc. (TSE:4480) CEO Kohei Takiguchi's holdings have lost 16% of their value

Explore Medley's Fair Values from the Community and select yours

Key Insights

• Insiders appear to have a vested interest in Medley's growth, as seen by their sizeable ownership
• The top 6 shareholders own 54% of the company
• Institutions own 29% of Medley

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A look at the shareholders of Medley, Inc. (TSE:4480) can tell us which group is most powerful. The group holding the most number of shares in the company, around 35% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 16% decline in share price, insiders suffered the most losses.

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

See our latest analysis for Medley

What Does The Institutional Ownership Tell Us About Medley?

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.

Medley already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Medley's earnings history below. Of course, the future is what really matters.

It looks like hedge funds own 5.2% of Medley shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company's CEO Kohei Takiguchi is the largest shareholder with 20% of shares outstanding. Goichiro Toyoda is the second largest shareholder owning 10% of common stock, and Polar Capital Holdings Plc holds about 8.0% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Medley

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.

It seems insiders own a significant proportion of Medley, Inc.. Insiders own JP¥30b worth of shares in the JP¥86b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Medley. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Medley better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Medley you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.