istyle Inc.'s (TSE:3660) 11% loss last week hit both individual investors who own 47% as well as institutions

Key Insights

• The considerable ownership by retail investors in istyle indicates that they collectively have a greater say in management and business strategy
• The top 12 shareholders own 50% of the company
• Insider ownership in istyle is 17%

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To get a sense of who is truly in control of istyle Inc. (TSE:3660), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 47% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions, who own 35% shares weren’t spared from last week’s JP¥4.0b market cap drop, retail investors as a group suffered the maximum losses

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

Check out our latest analysis for istyle

What Does The Institutional Ownership Tell Us About istyle?

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.

istyle already has institutions on the share registry. Indeed, they own a respectable stake in the 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 istyle, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in istyle. Looking at our data, we can see that the largest shareholder is the CEO Tetsuro Yoshimatsu with 16% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.9% and 5.3%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 12 have the combined ownership of 50% 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of istyle

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.

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.

It seems insiders own a significant proportion of istyle Inc.. It has a market capitalization of just JP¥34b, and insiders have JP¥5.8b 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

With a 47% ownership, the general public, mostly comprising of individual investors, have some degree of sway over istyle. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with istyle .

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.