Painful week for individual investors invested in Nagano Keiki Co., Ltd. (TSE:7715) after 11% drop, institutions also suffered losses

Key Insights

• Nagano Keiki's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 48% ownership
• Institutional ownership in Nagano Keiki is 19%

A look at the shareholders of Nagano Keiki Co., Ltd. (TSE:7715) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 19% shares weren’t spared from last week’s JP¥5.3b market cap drop, individual investors as a group suffered the maximum losses

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

View our latest analysis for Nagano Keiki

What Does The Institutional Ownership Tell Us About Nagano Keiki?

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 Nagano Keiki. 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 Nagano Keiki's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Nagano Keiki. Nagano Keiki Co., Ltd , Partners Shareholding Commission is currently the company's largest shareholder with 7.7% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.3% and 4.3%, of the shares outstanding, respectively.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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

Insider Ownership Of Nagano Keiki

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.

We can see that insiders own shares in Nagano Keiki Co., Ltd.. As individuals, the insiders collectively own JP¥2.6b worth of the JP¥46b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 54% of Nagano Keiki. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

It appears to us that public companies own 14% of Nagano Keiki. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Nagano Keiki , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.