eSOL Co.,Ltd. (TSE:4420) surges 10%; individual investors who own 45% shares profited along with insiders

Key Insights

• The considerable ownership by individual investors in eSOLLtd indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 10 shareholders
• Insiders own 25% of eSOLLtd

Every investor in eSOL Co.,Ltd. (TSE:4420) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 45% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s JP¥1.6b market cap gain, insiders too had a 25% share in those profits.

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

Check out our latest analysis for eSOLLtd

What Does The Institutional Ownership Tell Us About eSOLLtd?

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 eSOLLtd. 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 eSOLLtd, (below). Of course, keep in mind that there are other factors to consider, too.

eSOLLtd is not owned by hedge funds. Esol Co.,Ltd., Employee Shareholding Association is currently the company's largest shareholder with 12% of shares outstanding. With 8.6% and 6.9% of the shares outstanding respectively, Katsutoshi Hasegawa and DENSO Corporation are the second and third largest shareholders. Katsutoshi Hasegawa, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We did some more digging and found that 10 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 eSOLLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our information suggests that insiders maintain a significant holding in eSOL Co.,Ltd.. Insiders have a JP¥4.2b stake in this JP¥17b business. 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, who are usually individual investors, hold a 45% stake in eSOLLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 11% of the eSOLLtd shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that eSOLLtd is showing 3 warning signs in our investment analysis , and 2 of those are significant...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.