The recent 3.4% gain must have brightened CEO Tadashi Yanai's week, Fast Retailing Co., Ltd.'s (TSE:9983) most bullish insider

Key Insights

• Fast Retailing's significant insider ownership suggests inherent interests in company's expansion
• 53% of the business is held by the top 4 shareholders
• 36% of Fast Retailing is held by Institutions

Every investor in Fast Retailing Co., Ltd. (TSE:9983) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 42% ownership. 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 were the biggest beneficiaries of last week’s 3.4% gain.

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

Check out our latest analysis for Fast Retailing

What Does The Institutional Ownership Tell Us About Fast Retailing?

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.

We can see that Fast Retailing does have institutional investors; and they hold a good portion of the company's stock. 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 Fast Retailing, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Fast Retailing. Looking at our data, we can see that the largest shareholder is the CEO Tadashi Yanai with 25% of shares outstanding. Nomura Asset Management Co., Ltd. is the second largest shareholder owning 11% of common stock, and Kazumi Yanai holds about 9.3% of the company stock. Interestingly, the third-largest shareholder, Kazumi Yanai is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 Fast Retailing

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

It seems insiders own a significant proportion of Fast Retailing Co., Ltd.. It has a market capitalization of just JP¥16t, and insiders have JP¥6.9t worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Fast Retailing. 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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.