Retail investors are Mitsubishi Paper Mills Limited's (TSE:3864) biggest owners and were rewarded after market cap rose by JP¥4.2b last week

Key Insights

• Significant control over Mitsubishi Paper Mills by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 12 shareholders own 50% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Mitsubishi Paper Mills Limited (TSE:3864) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 49% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors collectively scored the highest last week as the company hit JP¥29b market cap following a 17% gain in the stock.

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

Check out our latest analysis for Mitsubishi Paper Mills

What Does The Institutional Ownership Tell Us About Mitsubishi Paper Mills?

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.

As you can see, institutional investors have a fair amount of stake in Mitsubishi Paper Mills. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Mitsubishi Paper Mills, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Mitsubishi Paper Mills. Oji Holdings Corporation is currently the company's largest shareholder with 34% of shares outstanding. With 4.9% and 2.3% of the shares outstanding respectively, Isao Nasu and Mitsubishi Paper Mills Limited, Client Stock Ownership Association are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 50% implying that 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Mitsubishi Paper Mills

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can see that insiders own shares in Mitsubishi Paper Mills Limited. In their own names, insiders own JP¥1.4b worth of stock in the JP¥29b company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

With a 49% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mitsubishi Paper Mills. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

We can see that public companies hold 37% of the Mitsubishi Paper Mills shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Mitsubishi Paper Mills (1 is a bit concerning) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.