Public companies in LY Corporation (TSE:4689) are its biggest bettors, and their bets paid off as stock gained 3.2% last week

Key Insights

• LY's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is SoftBank Corp. with a 65% stake
• Institutions own 12% of LY

Every investor in LY Corporation (TSE:4689) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 65% 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.

Clearly, public companies benefitted the most after the company's market cap rose by JP¥94b last week.

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

View our latest analysis for LY

What Does The Institutional Ownership Tell Us About LY?

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 LY. 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. 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 LY, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in LY. SoftBank Corp. is currently the largest shareholder, with 65% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. The second and third largest shareholders are Nomura Asset Management Co., Ltd. and BlackRock, Inc., with an equal amount of shares to their name at 1.3%.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of LY

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own less than 1% of LY Corporation. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own JP¥12b of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LY. 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

We can see that public companies hold 65% of the LY shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with LY .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.