While institutions invested in Rohto Pharmaceutical Co.,Ltd. (TSE:4527) benefited from last week's 4.4% gain, retail investors stood to gain the most

Key Insights

• The considerable ownership by retail investors in Rohto PharmaceuticalLtd indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 50% ownership
• Institutions own 43% of Rohto PharmaceuticalLtd

A look at the shareholders of Rohto Pharmaceutical Co.,Ltd. (TSE:4527) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 4.4% price gain, institutions also received a 43% cut.

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

View our latest analysis for Rohto PharmaceuticalLtd

What Does The Institutional Ownership Tell Us About Rohto PharmaceuticalLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Rohto PharmaceuticalLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Rohto PharmaceuticalLtd'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 Rohto PharmaceuticalLtd. Looking at our data, we can see that the largest shareholder is Massachusetts Financial Services Company with 7.6% of shares outstanding. With 5.1% and 3.3% of the shares outstanding respectively, SPARX Asset Management Co., Ltd. and MUFG Bank, Ltd.,Investment Banking Arm are the second and third largest shareholders. Furthermore, CEO Yamada Kunio is the owner of 1.7% of the company's shares.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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

Insider Ownership Of Rohto PharmaceuticalLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 some shares in Rohto Pharmaceutical Co.,Ltd.. The insiders have a meaningful stake worth JP¥29b. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rohto PharmaceuticalLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 4.7%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.