Kobayashi Pharmaceutical Co., Ltd.'s (TSE:4967) last week's 5.0% decline must have disappointed individual investors who have a significant stake

Key Insights

• The considerable ownership by individual investors in Kobayashi Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• A total of 10 investors have a majority stake in the company with 50% ownership
• Insiders own 20% of Kobayashi Pharmaceutical

To get a sense of who is truly in control of Kobayashi Pharmaceutical Co., Ltd. (TSE:4967), it is important to understand the ownership structure of the business. With 43% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week’s 5.0% price drop, insiders with their 20% also suffered.

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

See our latest analysis for Kobayashi Pharmaceutical

What Does The Institutional Ownership Tell Us About Kobayashi Pharmaceutical?

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.

As you can see, institutional investors have a fair amount of stake in Kobayashi Pharmaceutical. 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 Kobayashi Pharmaceutical's historic earnings and revenue below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 11% of Kobayashi Pharmaceutical. 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 largest shareholder is Akihiro Kobayashi, with ownership of 12%. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 8.1% by the third-largest shareholder.

We also observed that the top 10 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. 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 Kobayashi Pharmaceutical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Kobayashi Pharmaceutical Co., Ltd.. It is very interesting to see that insiders have a meaningful JP¥90b stake in this JP¥440b 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 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kobayashi Pharmaceutical. 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.

Private Company Ownership

Our data indicates that Private Companies hold 8.0%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kobayashi Pharmaceutical better, we need to consider many other factors. For instance, we've identified 2 warning signs for Kobayashi Pharmaceutical that you should be aware of.

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.