Hokuriku Electric Power Company (TSE:9505) surges 7.5%; individual investors who own 60% shares profited along with institutions

Key Insights

• The considerable ownership by individual investors in Hokuriku Electric Power indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 41% of the company
• Institutions own 29% of Hokuriku Electric Power

Every investor in Hokuriku Electric Power Company (TSE:9505) should be aware of the most powerful shareholder groups. With 60% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors gained the most after market cap touched JP¥174b last week, while institutions who own 29% also benefitted.

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

Check out our latest analysis for Hokuriku Electric Power

What Does The Institutional Ownership Tell Us About Hokuriku Electric Power?

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.

We can see that Hokuriku Electric Power 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 Hokuriku Electric Power's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hokuriku Electric Power. Toyama Prefecture is currently the largest shareholder, with 5.4% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.9% and 3.7% of the stock.

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.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Hokuriku Electric Power

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 report that insiders do own shares in Hokuriku Electric Power Company. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around JP¥3.0b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 60% stake in Hokuriku Electric Power, suggesting it is a fairly popular stock. 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 Hokuriku Electric Power better, we need to consider many other factors. For instance, we've identified 4 warning signs for Hokuriku Electric Power (2 are significant) 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.