Japan Post Insurance Co., Ltd.'s (TSE:7181) stock price dropped 4.8% last week; public companies would not be happy

Key Insights

• Japan Post Insurance's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the company is held by a single shareholder (Japan Post Holdings Co., Ltd.)
• Institutional ownership in Japan Post Insurance is 17%

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To get a sense of who is truly in control of Japan Post Insurance Co., Ltd. (TSE:7181), it is important to understand the ownership structure of the business. With 51% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 4.8% decline in share price, public companies suffered the most losses.

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

View our latest analysis for Japan Post Insurance

What Does The Institutional Ownership Tell Us About Japan Post Insurance?

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.

We can see that Japan Post Insurance 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. 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 Japan Post Insurance's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Japan Post Insurance. The company's largest shareholder is Japan Post Holdings Co., Ltd., with ownership of 51%. This implies that they have majority interest control of the future of the company. The second and third largest shareholders are The Vanguard Group, Inc. and Nomura Asset Management Co., Ltd., with an equal amount of shares to their name at 2.0%.

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 Japan Post Insurance

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.

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 information suggests that Japan Post Insurance Co., Ltd. insiders own under 1% of the company. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own JP¥178m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. 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

Public companies currently own 51% of Japan Post Insurance stock. 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 Japan Post Insurance better, we need to consider many other factors. Be aware that Japan Post Insurance is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...

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.