Both retail investors who control a good portion of Nippon Chemical Industrial Co., Ltd. (TSE:4092) along with institutions must be dismayed after last week's 12% decrease

Key Insights

• The considerable ownership by retail investors in Nippon Chemical Industrial indicates that they collectively have a greater say in management and business strategy
• The top 17 shareholders own 50% of the company
• 41% of Nippon Chemical Industrial is held by Institutions

A look at the shareholders of Nippon Chemical Industrial Co., Ltd. (TSE:4092) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions, who own 41% shares weren’t spared from last week’s JP¥2.9b market cap drop, retail investors as a group suffered the maximum losses

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

View our latest analysis for Nippon Chemical Industrial

What Does The Institutional Ownership Tell Us About Nippon Chemical Industrial?

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.

As you can see, institutional investors have a fair amount of stake in Nippon Chemical Industrial. 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 Nippon Chemical Industrial's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Nippon Chemical Industrial. Nippon Chemical Industrial Co., Ltd., Partners Shareholding Commission is currently the largest shareholder, with 9.3% of shares outstanding. Sumitomo Mitsui DS Asset Management Company, Limited is the second largest shareholder owning 4.8% of common stock, and Ichiyoshi Asset Management Co.,Ltd. holds about 4.0% of the company stock.

After doing some more digging, we found that the top 17 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Nippon Chemical Industrial

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Nippon Chemical Industrial Co., Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than JP¥91m worth of shares in the JP¥21b company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

We can see that Private Companies own 3.0%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Nippon Chemical Industrial , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.