Public companies among Cosmos Initia Co., Ltd.'s (TSE:8844) largest shareholders, saw gain in holdings value after stock jumped 11% last week

Key Insights

• Significant control over Cosmos Initia by public companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 63% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

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To get a sense of who is truly in control of Cosmos Initia Co., Ltd. (TSE:8844), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 63% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, public companies benefitted the most after the company's market cap rose by JP¥4.6b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Cosmos Initia.

View our latest analysis for Cosmos Initia

What Does The Institutional Ownership Tell Us About Cosmos Initia?

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.

Less than 5% of Cosmos Initia is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Cosmos Initia is not owned by hedge funds. The company's largest shareholder is Daiwa House Industry Co., Ltd., with ownership of 38%. Meanwhile, the second and third largest shareholders, hold 25% and 2.1%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Cosmos Initia

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.

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.

We can report that insiders do own shares in Cosmos Initia Co., Ltd.. In their own names, insiders own JP¥3.1b worth of stock in the JP¥46b 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

The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

Public companies currently own 63% of Cosmos Initia 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 Cosmos Initia better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Cosmos Initia (of which 1 makes us a bit uncomfortable!) you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.