Painful week for individual investors invested in Oki Electric Industry Co., Ltd. (TSE:6703) after 9.6% drop, institutions also suffered losses

Key Insights

• Significant control over Oki Electric Industry by individual investors implies that the general public has more power to influence management and governance-related decisions
• 43% of the business is held by the top 25 shareholders
• Institutions own 39% of Oki Electric Industry

Every investor in Oki Electric Industry Co., Ltd. (TSE:6703) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 39% came under pressure after market cap dropped to JP¥84b last week,individual investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Oki Electric Industry.

See 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.

As you can see, institutional investors have a fair amount of stake in Oki Electric Industry. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Oki Electric Industry, (below). Of course, keep in mind that there are other factors to consider, too.

Oki Electric Industry is not owned by hedge funds. Nomura Asset Management Co., Ltd. is currently the 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.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Oki Electric Industry

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.

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 data suggests that insiders own under 1% of Oki Electric Industry Co., Ltd. in their own names. It has a market capitalization of just JP¥84b, and the board has only JP¥82m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 57% 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Oki Electric Industry better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Oki Electric Industry (including 1 which is a bit unpleasant) .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.