Ricoh Company, Ltd. (TSE:7752) is a favorite amongst institutional investors who own 51%

Simply Wall St · 10/14 21:08

Key Insights

  • Given the large stake in the stock by institutions, Ricoh Company's stock price might be vulnerable to their trading decisions
  • 52% of the business is held by the top 9 shareholders
  • Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Ricoh Company, Ltd. (TSE:7752), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 51% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

In the chart below, we zoom in on the different ownership groups of Ricoh Company.

See our latest analysis for Ricoh Company

ownership-breakdown
TSE:7752 Ownership Breakdown October 14th 2024

What Does The Institutional Ownership Tell Us About Ricoh Company?

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.

Ricoh Company already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Ricoh Company, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
TSE:7752 Earnings and Revenue Growth October 14th 2024

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It looks like hedge funds own 19% of Ricoh Company shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Effissimo Capital Management Pte Ltd. is the largest shareholder with 19% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 8.2% of common stock, and Nomura Asset Management Co., Ltd. holds about 4.4% of the company stock.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Ricoh Company

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

Our most recent data indicates that insiders own less than 1% of Ricoh Company, Ltd.. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around JP¥257m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ricoh Company. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Ricoh Company better, we need to consider many other factors. For example, we've discovered 1 warning sign for Ricoh Company that you should be aware of before investing here.

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.