Painful week for individual investors invested in Hioki E.E. Corporation (TSE:6866) after 12% drop, institutions also suffered losses

Key Insights

• Significant control over Hioki E.E by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 14 shareholders
• 19% of Hioki E.E is held by insiders

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To get a sense of who is truly in control of Hioki E.E. Corporation (TSE:6866), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 43% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 12% price drop, institutions with their 24% holdings also suffered.

Let's delve deeper into each type of owner of Hioki E.E, beginning with the chart below.

Check out our latest analysis for Hioki E.E

What Does The Institutional Ownership Tell Us About Hioki E.E?

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.

As you can see, institutional investors have a fair amount of stake in Hioki E.E. 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 Hioki E.E, (below). Of course, keep in mind that there are other factors to consider, too.

Hioki E.E is not owned by hedge funds. Hioki EE Corp. ESOP is currently the company's largest shareholder with 6.0% of shares outstanding. Tsuneaki Hioki is the second largest shareholder owning 5.9% of common stock, and Yuji Hioki holds about 5.3% of the company stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Hioki E.E

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own a reasonable proportion of Hioki E.E. Corporation. It has a market capitalization of just JP¥86b, and insiders have JP¥16b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 43% stake in Hioki E.E. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

It appears to us that public companies own 4.9% of Hioki E.E. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hioki E.E you should know about.

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.