Retail investors who have a significant stake must be disappointed along with institutions after The Pack Corporation's (TSE:3950) market cap dropped by JP¥7.9b

Key Insights

• The considerable ownership by retail investors in Pack indicates that they collectively have a greater say in management and business strategy
• A total of 11 investors have a majority stake in the company with 52% ownership
• 35% of Pack is held by Institutions

To get a sense of who is truly in control of The Pack Corporation (TSE:3950), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 41% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 35% came under pressure after market cap dropped to JP¥67b last week,retail investors took the most losses.

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

See our latest analysis for Pack

What Does The Institutional Ownership Tell Us About Pack?

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

Pack is not owned by hedge funds. Our data shows that Morita Memorial Welfare Foundation, Endowment Arm is the largest shareholder with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.1% and 6.6% of the stock.

After doing some more digging, we found that the top 11 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Pack

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that The Pack Corporation insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just JP¥67b, and the board has only JP¥309m 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

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Pack. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 3.0% of Pack. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Pack better, we need to consider many other factors. For instance, we've identified 1 warning sign for Pack that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com