Tatsumi Miyazaki SERAKU Co., Ltd.'s (TSE:6199) CEO is the most bullish insider, and their stock value gained 10%last week

Key Insights

• Significant insider control over SERAKU implies vested interests in company growth
• The top 2 shareholders own 58% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls SERAKU Co., Ltd. (TSE:6199), then you'll have to look at the makeup of its share registry. With 60% stake, individual insiders 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).

Clearly, insiders benefitted the most after the company's market cap rose by JP¥1.8b last week.

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

Check out our latest analysis for SERAKU

What Does The Institutional Ownership Tell Us About SERAKU?

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.

SERAKU already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 SERAKU's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in SERAKU. With a 50% stake, CEO Tatsumi Miyazaki is the largest shareholder. With 8.5% and 1.2% of the shares outstanding respectively, Hiromi Miyazaki and SERAKU Co., Ltd., Employee Shareholding Association are the second and third largest shareholders. Interestingly, the second-largest shareholder, Hiromi Miyazaki is also Head of Sales, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 58% stake.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of SERAKU

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the SERAKU Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of JP¥19b, that means they have JP¥11b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SERAKU. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SERAKU better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for SERAKU (of which 1 is significant!) 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.