Nippon Paper Industries Co., Ltd.'s (TSE:3863) market cap dropped JP¥7.6b last week; individual investors who hold 60% were hit as were institutions

Key Insights

• Nippon Paper Industries' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 41% of the company
• Institutional ownership in Nippon Paper Industries is 35%

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Every investor in Nippon Paper Industries Co., Ltd. (TSE:3863) should be aware of the most powerful shareholder groups. With 60% 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).

Following a 6.4% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 35% stock also took a hit.

Let's delve deeper into each type of owner of Nippon Paper Industries, beginning with the chart below.

See our latest analysis for Nippon Paper Industries

What Does The Institutional Ownership Tell Us About Nippon Paper Industries?

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 Nippon Paper 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 Nippon Paper Industries, (below). Of course, keep in mind that there are other factors to consider, too.

Nippon Paper Industries is not owned by hedge funds. Our data shows that Mizuho Financial Group, Inc., Asset Management Arm is the largest shareholder with 6.0% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 4.3% of common stock, and Nissay Asset Management Corporation holds about 4.1% of the company stock.

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. 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 Nippon Paper Industries

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.

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 Nippon Paper Industries Co., Ltd. insiders own under 1% of the company. It has a market capitalization of just JP¥111b, and the board has only JP¥158m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 60% of Nippon Paper Industries. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Nippon Paper Industries better, we need to consider many other factors. Take risks for example - Nippon Paper Industries has 3 warning signs (and 2 which don't sit too well with us) we think you should know about.

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.