Toray Industries, Inc.'s (TSE:3402) top owners are individual investors with 58% stake, while 40% is held by institutions

Key Insights

• The considerable ownership by individual investors in Toray Industries indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 37% of the company
• 40% of Toray Industries is held by Institutions

If you want to know who really controls Toray Industries, Inc. (TSE:3402), then you'll have to look at the makeup of its share registry. With 58% 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).

Meanwhile, institutions make up 40% of the company’s shareholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

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

See our latest analysis for Toray Industries

What Does The Institutional Ownership Tell Us About Toray Industries?

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.

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

Hedge funds don't have many shares in Toray Industries. The company's largest shareholder is Nissay Asset Management Corporation, with ownership of 6.7%. Meanwhile, the second and third largest shareholders, hold 6.4% and 3.6%, of the shares outstanding, respectively.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Toray Industries

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 data suggests that insiders own under 1% of Toray Industries, Inc. in their own names. 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¥628m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- including retail investors -- own 58% of Toray Industries. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

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

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.