Aichi Steel Corporation's (TSE:5482) biggest owners are public companies who got richer after stock soared 8.9% last week

Key Insights

• Significant control over Aichi Steel by public companies implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 51% of the company
• 21% of Aichi Steel is held by Institutions

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If you want to know who really controls Aichi Steel Corporation (TSE:5482), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 40% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies were the biggest beneficiaries of last week’s 8.9% gain.

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

View our latest analysis for Aichi Steel

What Does The Institutional Ownership Tell Us About Aichi Steel?

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.

As you can see, institutional investors have a fair amount of stake in Aichi Steel. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Aichi Steel, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Aichi Steel. Looking at our data, we can see that the largest shareholder is Toyota Motor Corporation with 25% of shares outstanding. Toyota Industries Corporation is the second largest shareholder owning 8.5% of common stock, and Nippon Steel Corporation holds about 6.4% of the company stock.

We did some more digging and found that 7 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Aichi Steel

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our data suggests that insiders own under 1% of Aichi Steel Corporation in their own names. It has a market capitalization of just JP¥144b, and the board has only JP¥905m worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Aichi Steel. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

Public companies currently own 40% of Aichi Steel 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Aichi Steel better, we need to consider many other factors. For example, we've discovered 2 warning signs for Aichi Steel (1 shouldn't be ignored!) that you should be aware of before investing here.

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.