Institutions profited after Oki Electric Industry Co., Ltd.'s (TSE:6703) market cap rose JP¥12b last week but individual investors profited the most

Key Insights

• The considerable ownership by individual investors in Oki Electric Industry indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 43% of the company
• Institutional ownership in Oki Electric Industry is 40%

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If you want to know who really controls Oki Electric Industry Co., Ltd. (TSE:6703), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched JP¥95b last week, while institutions who own 40% also benefitted.

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

Check out our latest analysis for Oki Electric Industry

What Does The Institutional Ownership Tell Us About Oki Electric Industry?

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.

We can see that Oki Electric Industry 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. 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 Oki Electric Industry's historic earnings and revenue below, but keep in mind there's always more to the story.

Oki Electric Industry is not owned by hedge funds. Nomura Asset Management Co., Ltd. is currently the company's largest shareholder with 4.7% of shares outstanding. Nikko Asset Management Co., Ltd. is the second largest shareholder owning 4.6% of common stock, and Sumitomo Mitsui Trust Asset Management Co., Ltd. holds about 3.7% of the company stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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

Insider Ownership Of Oki Electric Industry

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.

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.

Our most recent data indicates that insiders own less than 1% of Oki Electric Industry Co., Ltd.. It appears that the board holds about JP¥84m worth of stock. This compares to a market capitalization of JP¥95b. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 56% of Oki Electric Industry shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 4 warning signs for Oki Electric Industry (1 doesn't sit too well with us) that you should be aware of.

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.