Institutional owners may take dramatic actions as KOSÉ Corporation's (TSE:4922) recent 4.9% drop adds to one-year losses

Key Insights

• Given the large stake in the stock by institutions, KOSÉ's stock price might be vulnerable to their trading decisions
• 51% of the business is held by the top 6 shareholders
• Insider ownership in KOSÉ is 33%

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A look at the shareholders of KOSÉ Corporation (TSE:4922) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, institutional investors endured the highest losses last week after market cap fell by JP¥16b. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 44% for shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell KOSÉ which might hurt individual investors.

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

View our latest analysis for KOSÉ

What Does The Institutional Ownership Tell Us About KOSÉ?

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.

We can see that KOSÉ does have institutional investors; and they hold a good portion of the company's stock. 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. 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 KOSÉ, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in KOSÉ. Looking at our data, we can see that the largest shareholder is The Cosmetology Research Foundation, Endowment Arm with 12% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 12% by the third-largest shareholder. Note that the second and third-largest shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders. Additionally, the company's CEO Kazutoshi Kobayashi directly holds 2.4% of the total shares outstanding.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of KOSÉ

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.

Our most recent data indicates that insiders own a reasonable proportion of KOSÉ Corporation. It is very interesting to see that insiders have a meaningful JP¥104b stake in this JP¥318b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over KOSÉ. 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 KOSÉ better, we need to consider many other factors. Be aware that KOSÉ is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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.