Both individual investors who control a good portion of Kyosan Electric Manufacturing Co., Ltd. (TSE:6742) along with institutions must be dismayed after last week's 11% decrease

Key Insights

• Significant control over Kyosan Electric Manufacturing by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 13 investors have a majority stake in the company with 50% ownership
• Institutions own 31% of Kyosan Electric Manufacturing

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If you want to know who really controls Kyosan Electric Manufacturing Co., Ltd. (TSE:6742), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 11% price drop, institutions with their 31% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Kyosan Electric Manufacturing.

See our latest analysis for Kyosan Electric Manufacturing

What Does The Institutional Ownership Tell Us About Kyosan Electric Manufacturing?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Kyosan Electric Manufacturing does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Kyosan Electric Manufacturing's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Kyosan Electric Manufacturing. Nissay Asset Management Corporation is currently the largest shareholder, with 9.7% of shares outstanding. For context, the second largest shareholder holds about 8.1% of the shares outstanding, followed by an ownership of 5.8% by the third-largest shareholder.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Kyosan Electric Manufacturing

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.

Our data suggests that insiders own under 1% of Kyosan Electric Manufacturing Co., Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It appears that the board holds about JP¥246m worth of stock. This compares to a market capitalization of JP¥29b. 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, who are usually individual investors, hold a 46% stake in Kyosan Electric Manufacturing. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 8.1%, of the company's shares. 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

Public companies currently own 8.1% of Kyosan Electric Manufacturing stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kyosan Electric Manufacturing better, we need to consider many other factors. For example, we've discovered 2 warning signs for Kyosan Electric Manufacturing (1 is significant!) that you should be aware of before investing here.

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.