After losing 35% in the past year, Toyo Gosei Co.,Ltd. (TSE:4970) institutional owners must be relieved by the recent gain

Key Insights

• Significantly high institutional ownership implies Toyo GoseiLtd's stock price is sensitive to their trading actions
• A total of 9 investors have a majority stake in the company with 51% ownership
• 26% of Toyo GoseiLtd is held by insiders

A look at the shareholders of Toyo Gosei Co.,Ltd. (TSE:4970) can tell us which group is most powerful. The group holding the most number of shares in the company, around 38% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

After a year of 35% losses, last week’s 15% gain would be welcomed by institutional investors as a possible sign that returns might start trending higher.

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

See our latest analysis for Toyo GoseiLtd

What Does The Institutional Ownership Tell Us About Toyo GoseiLtd?

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 Toyo GoseiLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Toyo GoseiLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Toyo GoseiLtd. Looking at our data, we can see that the largest shareholder is the CEO Yujin Kimura with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.3% and 5.6% of the stock.

We did some more digging and found that 9 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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Toyo GoseiLtd

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.

It seems insiders own a significant proportion of Toyo Gosei Co.,Ltd.. It has a market capitalization of just JP¥46b, and insiders have JP¥12b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 35% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Toyo GoseiLtd has 1 warning sign we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.