Computer Engineering & Consulting Ltd.'s (TSE:9692) market cap dropped JP¥6.7b last week; individual investors who hold 43% were hit as were institutions

Key Insights

• Computer Engineering & Consulting's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 15 investors have a majority stake in the company with 50% ownership
• Institutions own 29% of Computer Engineering & Consulting

If you want to know who really controls Computer Engineering & Consulting Ltd. (TSE:9692), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 43% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 29% shares weren’t spared from last week’s JP¥6.7b market cap drop, retail investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Computer Engineering & Consulting, beginning with the chart below.

View our latest analysis for Computer Engineering & Consulting

What Does The Institutional Ownership Tell Us About Computer Engineering & Consulting?

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 Computer Engineering & Consulting does have institutional investors; and they hold a good portion of the company's stock. 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 Computer Engineering & Consulting, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Computer Engineering & Consulting. Mitsuiwa Corporation is currently the company's largest shareholder with 13% of shares outstanding. For context, the second largest shareholder holds about 7.1% of the shares outstanding, followed by an ownership of 4.0% by the third-largest shareholder.

After doing some more digging, we found that the top 15 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Computer Engineering & Consulting

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

We can report that insiders do own shares in Computer Engineering & Consulting Ltd.. It has a market capitalization of just JP¥57b, and insiders have JP¥2.3b worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 16%, of the Computer Engineering & Consulting stock. 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.

Public Company Ownership

We can see that public companies hold 3.7% of the Computer Engineering & Consulting 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:

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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.