Painful week for retail investors invested in Toyo Gosei Co.,Ltd. (TSE:4970) after 12% drop, institutions also suffered losses

Explore Toyo GoseiLtd's Fair Values from the Community and select yours

Key Insights

• The considerable ownership by retail investors in Toyo GoseiLtd indicates that they collectively have a greater say in management and business strategy
• The top 10 shareholders own 50% of the company
• 26% of Toyo GoseiLtd is held by insiders

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A look at the shareholders of Toyo Gosei Co.,Ltd. (TSE:4970) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 40% 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 33% came under pressure after market cap dropped to JP¥36b last week,retail investors took the most losses.

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

See our latest analysis for Toyo GoseiLtd

What Does The Institutional Ownership Tell Us About Toyo GoseiLtd?

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 Toyo GoseiLtd. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Toyo GoseiLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Toyo GoseiLtd. With a 16% stake, CEO Yujin Kimura is the largest shareholder. Airi Kimura is the second largest shareholder owning 7.3% of common stock, and Allianz Asset Management GmbH holds about 5.6% of the company stock.

We did some more digging and found that 10 of the top shareholders account for roughly 50% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Toyo GoseiLtd

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 most recent data indicates that insiders own a reasonable proportion of Toyo Gosei Co.,Ltd.. Insiders own JP¥9.4b worth of shares in the JP¥36b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 40% 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Toyo GoseiLtd , 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.