While institutions invested in EDION Corporation (TSE:2730) benefited from last week's 6.9% gain, retail investors stood to gain the most

Simply Wall St · 04/15 05:56

Key Insights

  • EDION's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
  • The top 21 shareholders own 50% of the company
  • 23% of EDION is held by Institutions
We've discovered 2 warning signs about EDION. View them for free.

Every investor in EDION Corporation (TSE:2730) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 50% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 6.9% price gain, institutions also received a 23% cut.

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

Check out our latest analysis for EDION

ownership-breakdown
TSE:2730 Ownership Breakdown April 15th 2025

What Does The Institutional Ownership Tell Us About EDION?

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.

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

earnings-and-revenue-growth
TSE:2730 Earnings and Revenue Growth April 15th 2025

Hedge funds don't have many shares in EDION. Nitori Holdings Co., Ltd. is currently the company's largest shareholder with 9.8% of shares outstanding. For context, the second largest shareholder holds about 7.4% of the shares outstanding, followed by an ownership of 3.7% by the third-largest shareholder. Furthermore, CEO Masataka Kubo is the owner of 2.2% of the company's shares.

After doing some more digging, we found that the top 21 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of EDION

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in EDION Corporation. The insiders have a meaningful stake worth JP¥8.1b. Most would see this as a real positive. 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 50% stake in EDION, 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.

Public Company Ownership

We can see that public companies hold 13% of the EDION shares on issue. 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:

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. For example, we've discovered 2 warning signs for EDION (1 is significant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.