With 58% ownership in Daiichi Sankyo Company, Limited (TSE:4568), institutional investors have a lot riding on the business

Key Insights

• Institutions' substantial holdings in Daiichi Sankyo Company implies that they have significant influence over the company's share price
• 51% of the business is held by the top 17 shareholders
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Daiichi Sankyo Company, Limited (TSE:4568) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And things are looking up for institutional investors after the company gained JP¥686b in market cap last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 23%.

Let's delve deeper into each type of owner of Daiichi Sankyo Company, beginning with the chart below.

View our latest analysis for Daiichi Sankyo Company

What Does The Institutional Ownership Tell Us About Daiichi Sankyo Company?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Daiichi Sankyo Company. 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 Daiichi Sankyo Company, (below). Of course, keep in mind that there are other factors to consider, too.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Daiichi Sankyo Company. Our data shows that BlackRock, Inc. is the largest shareholder with 6.4% of shares outstanding. With 6.2% and 4.6% of the shares outstanding respectively, Capital Research and Management Company and Mitsubishi UFJ Trust and Banking Corporation, Asset Management Arm are the second and third largest shareholders.

After doing some more digging, we found that the top 17 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Daiichi Sankyo Company

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own less than 1% of Daiichi Sankyo Company, Limited. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own JP¥2.2b of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Daiichi Sankyo Company. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Daiichi Sankyo Company better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.