Nihon Nohyaku Co., Ltd.'s (TSE:4997) largest shareholders are public companies who were rewarded as market cap surged JP¥5.9b last week

Key Insights

• The considerable ownership by public companies in Nihon Nohyaku indicates that they collectively have a greater say in management and business strategy
• 51% of the company is held by a single shareholder (Adeka Corporation)
• 13% of Nihon Nohyaku is held by Institutions

We've discovered 1 warning sign about Nihon Nohyaku. View them for free.

Every investor in Nihon Nohyaku Co., Ltd. (TSE:4997) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies collectively scored the highest last week as the company hit JP¥62b market cap following a 11% gain in the stock.

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

See our latest analysis for Nihon Nohyaku

What Does The Institutional Ownership Tell Us About Nihon Nohyaku?

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.

We can see that Nihon Nohyaku 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. 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 Nihon Nohyaku'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 Nihon Nohyaku. The company's largest shareholder is Adeka Corporation, with ownership of 51%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 2.6% of the shares outstanding, followed by an ownership of 1.8% by the third-largest shareholder.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Nihon Nohyaku

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Shareholders would probably be interested to learn that insiders own shares in Nihon Nohyaku Co., Ltd.. In their own names, insiders own JP¥936m worth of stock in the JP¥62b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Nihon Nohyaku. 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

Public companies currently own 51% of Nihon Nohyaku stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 risks, for instance. Every company has them, and we've spotted 1 warning sign for Nihon Nohyaku you should know about.

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.