Private companies who have a significant stake must be disappointed along with institutions after Mitsui High-tec, Inc.'s (TSE:6966) market cap dropped by JP¥16b

Key Insights

• Significant control over Mitsui High-tec by private companies implies that the general public has more power to influence management and governance-related decisions
• 53% of the business is held by the top 5 shareholders
• Institutions own 28% of Mitsui High-tec

Every investor in Mitsui High-tec, Inc. (TSE:6966) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 32% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 5.6% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 28% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about Mitsui High-tec.

See our latest analysis for Mitsui High-tec

What Does The Institutional Ownership Tell Us About Mitsui High-tec?

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 Mitsui High-tec. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Mitsui High-tec's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Mitsui High-tec. The company's largest shareholder is Mitsui Create Co., Ltd, with ownership of 32%. For context, the second largest shareholder holds about 8.6% of the shares outstanding, followed by an ownership of 4.6% by the third-largest shareholder. In addition, we found that Yasunari Mitsui, the CEO has 3.2% of the shares allocated to their name.

On looking further, we found that 53% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Mitsui High-tec

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Mitsui High-tec, Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around JP¥15b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Mitsui High-tec. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 32%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Mitsui High-tec .

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.