Recent uptick might appease ULVAC, Inc. (TSE:6728) institutional owners after losing 1.9% over the past year

Key Insights

• Institutions' substantial holdings in ULVAC implies that they have significant influence over the company's share price
• 52% of the business is held by the top 11 shareholders
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of ULVAC, Inc. (TSE:6728) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 62% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week's JP¥13b market cap gain would probably be appreciated by institutional investors, especially after a year of 1.9% losses.

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

Check out our latest analysis for ULVAC

What Does The Institutional Ownership Tell Us About ULVAC?

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.

As you can see, institutional investors have a fair amount of stake in ULVAC. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see ULVAC's historic earnings and revenue below, but keep in mind there's always more to the story.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It looks like hedge funds own 10% of ULVAC shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Taiyo Pacific Partners L.P. is currently the largest shareholder, with 10% of shares outstanding. With 7.2% and 6.6% of the shares outstanding respectively, Fidelity International Ltd and Nissay Asset Management Corporation are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 52% implying that no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 ULVAC

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.

Our information suggests that ULVAC, Inc. insiders own under 1% of the company. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around JP¥290m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in ULVAC. 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 ULVAC better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for ULVAC you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.