The recent 9.4% gain must have brightened CEO Takanori Nakamura's week, Rakus Co., Ltd.'s (TSE:3923) most bullish insider

Key Insights

• Rakus' significant insider ownership suggests inherent interests in company's expansion
• The top 5 shareholders own 53% of the company
• Institutions own 20% of Rakus

Every investor in Rakus Co., Ltd. (TSE:3923) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 57% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by JP¥27b last week.

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

View our latest analysis for Rakus

What Does The Institutional Ownership Tell Us About Rakus?

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.

Rakus 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Rakus, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Rakus. Looking at our data, we can see that the largest shareholder is the CEO Takanori Nakamura with 34% of shares outstanding. With 5.2% and 5.0% of the shares outstanding respectively, Yoshifumi Matsushima and Hideyuki Inoue are the second and third largest shareholders.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Rakus

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 most recent data indicates that insiders own the majority of Rakus Co., Ltd.. This means they can collectively make decisions for the company. Insiders own JP¥181b worth of shares in the JP¥320b company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 22% stake in Rakus. 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 Rakus better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Rakus you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.