FFRI Security, Inc.'s (TSE:3692) 12% gain last week benefited both retail investors who own 49% as well as insiders

Key Insights

• FFRI Security's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 7 investors have a majority stake in the company with 51% ownership
• Insider ownership in FFRI Security is 46%

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If you want to know who really controls FFRI Security, Inc. (TSE:3692), then you'll have to look at the makeup of its share registry. With 49% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s JP¥6.9b market cap gain, insiders too had a 46% share in those profits.

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.

Less than 5% of FFRI Security is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in FFRI Security. With a 24% stake, CEO Yuji Ukai is the largest shareholder. Ryouji Kanai is the second largest shareholder owning 18% of common stock, and Shigeki Tanaka holds about 2.1% of the company stock. Interestingly, the second and third-largest shareholders also happen to be the Chief Technology Officer and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

We did some more digging and found that 7 of the top shareholders account for roughly 51% 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of FFRI Security

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own a reasonable proportion of FFRI Security, Inc.. It has a market capitalization of just JP¥63b, and insiders have JP¥29b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 49% stake in the company, and hence can't easily be ignored. 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:

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.