Institutional investors have a lot riding on Micronics Japan Co., Ltd. (TSE:6871) with 47% ownership

Key Insights

• Significantly high institutional ownership implies Micronics Japan's stock price is sensitive to their trading actions
• A total of 11 investors have a majority stake in the company with 52% ownership
• Insiders own 15% of Micronics Japan

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A look at the shareholders of Micronics Japan Co., Ltd. (TSE:6871) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 6.6% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 85%.

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

See our latest analysis for Micronics Japan

What Does The Institutional Ownership Tell Us About Micronics Japan?

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.

Micronics Japan already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Micronics Japan's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Micronics Japan. Looking at our data, we can see that the largest shareholder is Nomura Asset Management Co., Ltd. with 11% of shares outstanding. For context, the second largest shareholder holds about 8.4% of the shares outstanding, followed by an ownership of 6.6% by the third-largest shareholder. Masayoshi Hasegawa, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Looking at the shareholder registry, we can see that 52% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Micronics Japan

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Micronics Japan Co., Ltd.. It is very interesting to see that insiders have a meaningful JP¥40b stake in this JP¥265b business. 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

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Micronics Japan. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Micronics Japan better, we need to consider many other factors. Be aware that Micronics Japan is showing 2 warning signs in our investment analysis , 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.