CREAL Inc. (TSE:2998) Top Key Executive Akinari Tokuyama, the company's largest shareholder sees 22%reduction in holdings value

Key Insights

• Significant insider control over CREAL implies vested interests in company growth
• The top 3 shareholders own 52% of the company
• Institutional ownership in CREAL is 15%

A look at the shareholders of CREAL Inc. (TSE:2998) can tell us which group is most powerful. The group holding the most number of shares in the company, around 45% 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 as a group endured the highest losses after market cap fell by JP¥5.7b.

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

Check out our latest analysis for CREAL

What Does The Institutional Ownership Tell Us About CREAL?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that CREAL does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at CREAL's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in CREAL. From our data, we infer that the largest shareholder is Akinari Tokuyama (who also holds the title of Top Key Executive) with 25% 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 20% and 7.8% of the shares outstanding respectively, SBI Holdings, Inc. and Asset Management One Co., Ltd. are the second and third largest shareholders. Additionally, the company's CEO Daizo Yokota directly holds 6.7% of the total shares outstanding.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of CREAL

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in CREAL Inc.. It has a market capitalization of just JP¥20b, and insiders have JP¥9.1b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in CREAL. 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

It appears to us that public companies own 20% of CREAL. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand CREAL better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for CREAL you should be aware of, and 1 of them is a bit unpleasant.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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