Retail investors are gumi Inc.'s (TSE:3903) biggest owners and were rewarded after market cap rose by JP¥6.0b last week

Key Insights

• Significant control over gumi by retail investors implies that the general public has more power to influence management and governance-related decisions
• 52% of the business is held by the top 7 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

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If you want to know who really controls gumi Inc. (TSE:3903), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 49% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, retail investors benefitted the most after the company's market cap rose by JP¥6.0b last week.

In the chart below, we zoom in on the different ownership groups of gumi.

View our latest analysis for gumi

What Does The Lack Of Institutional Ownership Tell Us About gumi?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of gumi, for yourself, below.

We note that hedge funds don't have a meaningful investment in gumi. SBI Holdings, Inc. is currently the largest shareholder, with 20% of shares outstanding. With 20% and 3.2% of the shares outstanding respectively, SUPER STATE HOLDINGS Inc and Hironao Kunimitsu are the second and third largest shareholders. In addition, we found that Hiroyuki Kawamoto, the CEO has 2.0% of the shares allocated to their name.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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

Insider Ownership Of gumi

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.

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.

We can see that insiders own shares in gumi Inc.. As individuals, the insiders collectively own JP¥2.5b worth of the JP¥32b 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

With a 49% ownership, the general public, mostly comprising of individual investors, have some degree of sway over gumi. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 20%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

Public companies currently own 23% of gumi 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 gumi better, we need to consider many other factors. For instance, we've identified 2 warning signs for gumi (1 is a bit concerning) that you should be aware of.

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.