Institutional investors have a lot riding on Maeda Kosen Co., Ltd. (TSE:7821) with 38% ownership

Key Insights

• Significantly high institutional ownership implies Maeda Kosen's stock price is sensitive to their trading actions
• A total of 8 investors have a majority stake in the company with 52% ownership
• 33% of Maeda Kosen is held by insiders

To get a sense of who is truly in control of Maeda Kosen Co., Ltd. (TSE:7821), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 38% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week’s 9.1% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 24% and last week’s gain was the icing on the cake.

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

Check out our latest analysis for Maeda Kosen

What Does The Institutional Ownership Tell Us About Maeda Kosen?

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.

As you can see, institutional investors have a fair amount of stake in Maeda Kosen. 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. 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 Maeda Kosen's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Maeda Kosen. From our data, we infer that the largest shareholder is Takahiro Maeda (who also holds the title of President) with 21% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 7.9% and 6.5% of the shares outstanding respectively, Norges Bank Investment Management and Yoshihiro Maeda are the second and third largest shareholders. In addition, we found that Yukitoshi Maeda, the CEO has 5.7% of the shares allocated to their name.

We did some more digging and found that 8 of the top shareholders account for roughly 52% 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Maeda Kosen

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.

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.

It seems insiders own a significant proportion of Maeda Kosen Co., Ltd.. Insiders have a JP¥41b stake in this JP¥125b business. 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, who are usually individual investors, hold a 27% stake in Maeda Kosen. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Maeda Kosen better, we need to consider many other factors. Take risks for example - Maeda Kosen has 1 warning sign we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.