Global Security Experts Inc.'s (TSE:4417) market cap dropped JP¥5.4b last week; Public companies bore the brunt

Key Insights

• Global Security Experts' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 60% of the business is held by the top 2 shareholders
• Institutional ownership in Global Security Experts is 14%

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Every investor in Global Security Experts Inc. (TSE:4417) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 65% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies as a group endured the highest losses last week after market cap fell by JP¥5.4b.

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

See our latest analysis for Global Security Experts

What Does The Institutional Ownership Tell Us About Global Security Experts?

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.

As you can see, institutional investors have a fair amount of stake in Global Security Experts. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Global Security Experts' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Global Security Experts. Business Brain Showa-Ota Inc. is currently the largest shareholder, with 40% of shares outstanding. Kanematsu Corporation is the second largest shareholder owning 20% of common stock, and Asset Management One Co., Ltd. holds about 5.7% of the company stock. Furthermore, CEO Shiro Aoyagi is the owner of 1.7% of the company's shares.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Global Security Experts

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.

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 some shares in Global Security Experts Inc.. It has a market capitalization of just JP¥45b, and insiders have JP¥2.3b worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Global Security Experts. 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.

Public Company Ownership

We can see that public companies hold 65% of the Global Security Experts shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Global Security Experts better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Global Security Experts you should be aware of, and 1 of them is significant.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.