Institutions profited after Micronics Japan Co., Ltd.'s (TSE:6871) market cap rose JP¥7.5b last week but individual investors profited the most

Key Insights

• Significant control over Micronics Japan 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
• Insiders own 15% of Micronics Japan

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A look at the shareholders of Micronics Japan Co., Ltd. (TSE:6871) can tell us which group is most powerful. The group holding the most number of shares in the company, around 45% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched JP¥119b last week, while institutions who own 37% also benefitted.

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

View our latest analysis for Micronics Japan

What Does The Institutional Ownership Tell Us About Micronics Japan?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Micronics Japan does have institutional investors; and they hold a good portion of the company's stock. 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 Micronics Japan, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Micronics Japan. Looking at our data, we can see that the largest shareholder is Nomura Asset Management Co., Ltd. with 11% of shares outstanding. Masayoshi Hasegawa is the second largest shareholder owning 6.6% of common stock, and Nissay Asset Management Corporation holds about 4.3% of the company stock. Masayoshi Hasegawa, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 Micronics Japan

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 information suggests that insiders maintain a significant holding in Micronics Japan Co., Ltd.. Insiders own JP¥18b worth of shares in the JP¥119b company. 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-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. 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.

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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Micronics Japan (of which 1 is significant!) 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.