Retail investors among Toho Chemical Industry Company, Limited's (TSE:4409) largest shareholders, saw gain in holdings value after stock jumped 11% last week

Key Insights

• Significant control over Toho Chemical Industry Company by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 6 shareholders own 51% of the company
• Insider ownership in Toho Chemical Industry Company is 13%

We've discovered 3 warning signs about Toho Chemical Industry Company. View them for free.

A look at the shareholders of Toho Chemical Industry Company, Limited (TSE:4409) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 39% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, retail investors collectively scored the highest last week as the company hit JP¥15b market cap following a 11% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Toho Chemical Industry Company.

View our latest analysis for Toho Chemical Industry Company

What Does The Institutional Ownership Tell Us About Toho Chemical Industry Company?

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.

Toho Chemical Industry Company already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Toho Chemical Industry Company's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Toho Chemical Industry Company. Toho Chemical Industry Company, Limited, Client Stock Ownership Association is currently the largest shareholder, with 17% of shares outstanding. Tatsuo Nakasaki is the second largest shareholder owning 12% of common stock, and Mitsui Chemicals Inc., Retirement Benefit Trust holds about 6.6% of the company stock. Tatsuo Nakasaki, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We did some more digging and found that 6 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Toho Chemical Industry Company

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 information suggests that insiders maintain a significant holding in Toho Chemical Industry Company, Limited. Insiders own JP¥1.9b worth of shares in the JP¥15b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 39% 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.

Public Company Ownership

Public companies currently own 7.9% of Toho Chemical Industry Company stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Toho Chemical Industry Company (2 are concerning) that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free 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.