FFRI Security, Inc. (TSE:3692) surges 12%; retail investors who own 47% shares profited along with insiders

Key Insights

• FFRI Security's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 6 shareholders own 50% of the company
• Insider ownership in FFRI Security is 46%

Every investor in FFRI Security, Inc. (TSE:3692) should be aware of the most powerful shareholder groups. With 47% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Retail investors gained the most after market cap touched JP¥18b last week, while insiders who own 46% also benefitted.

In the chart below, we zoom in on the different ownership groups of FFRI Security.

Check out our latest analysis for FFRI Security

What Does The Institutional Ownership Tell Us About FFRI Security?

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.

FFRI Security 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. 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 FFRI Security's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in FFRI Security. The company's CEO Yuji Ukai is the largest shareholder with 25% of shares outstanding. Ryouji Kanai is the second largest shareholder owning 18% of common stock, and SBI Holdings Inc., Asset Management Arm holds about 2.6% of the company stock. Interestingly, the second-largest shareholder, Ryouji Kanai is also Chief Technology Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

We did some more digging and found that 6 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of FFRI Security

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.

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.

It seems insiders own a significant proportion of FFRI Security, Inc.. It has a market capitalization of just JP¥18b, and insiders have JP¥8.2b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 47% stake in the company, and hence can't easily be ignored. 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 FFRI Security better, we need to consider many other factors. Be aware that FFRI Security is showing 1 warning sign in our investment analysis , you should know about...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com