Sourcenext Corporation (TSE:4344) surges 10%; retail investors who own 53% shares profited along with insiders

Key Insights

• Significant control over Sourcenext by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 16 shareholders own 50% of the company
• 29% of Sourcenext is held by insiders

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

To get a sense of who is truly in control of Sourcenext Corporation (TSE:4344), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 53% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 10% price gain, insiders also received a 29% cut.

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

See our latest analysis for Sourcenext

What Does The Institutional Ownership Tell Us About Sourcenext?

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.

We can see that Sourcenext does have institutional investors; and they hold a good portion of the company's stock. 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 Sourcenext's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Sourcenext. Looking at our data, we can see that the largest shareholder is the CEO Noriyuki Matsuda with 29% of shares outstanding. With 10% and 2.2% of the shares outstanding respectively, Yodobashi Camera Co.,Ltd. and Nomura Asset Management Co., Ltd. are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 16 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Sourcenext

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 information suggests that insiders maintain a significant holding in Sourcenext Corporation. Insiders own JP¥7.5b worth of shares in the JP¥26b company. 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, mostly comprising of individual investors, collectively holds 53% of Sourcenext shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

Our data indicates that Private Companies hold 11%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Sourcenext is showing 2 warning signs in our investment analysis , you should know about...

Of course this may not be the best stock to buy. So take a peek at this free 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.

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

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.