Stock Analysis
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Bank of Innovation,Inc.'s (TSE:4393) CEO Tomohiro Higuchi is the most upbeat insider, and their holdings increased by 10% last week
Key Insights
- Significant insider control over Bank of InnovationInc implies vested interests in company growth
- A total of 2 investors have a majority stake in the company with 51% ownership
- Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
Every investor in Bank of Innovation,Inc. (TSE:4393) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 54% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, insiders scored the highest last week as the company hit JP¥21b market cap following a 10% gain in the stock.
Let's take a closer look to see what the different types of shareholders can tell us about Bank of InnovationInc.
Check out our latest analysis for Bank of InnovationInc
What Does The Institutional Ownership Tell Us About Bank of InnovationInc?
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 Bank of InnovationInc. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Bank of InnovationInc'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 Bank of InnovationInc. Looking at our data, we can see that the largest shareholder is the CEO Tomohiro Higuchi with 44% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.0% and 5.8% of the stock. Interestingly, the second-largest shareholder, Daisuke Tanaka is also Head of Human Resources, again, pointing towards strong insider ownership amongst the company's top shareholders.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.
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. 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 Bank of InnovationInc
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Our most recent data indicates that insiders own the majority of Bank of Innovation,Inc.. This means they can collectively make decisions for the company. So they have a JP¥11b stake in this JP¥21b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Bank of InnovationInc 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.
Valuation is complex, but we're here to simplify it.
Discover if Bank of InnovationInc might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.
About TSE:4393
Bank of InnovationInc
Develops and operates smartphone games in Japan.