Tachikawa Corporation's (TSE:7989) largest shareholders are individual investors who were rewarded as market cap surged JP¥3.7b last week
Key Insights
- Tachikawa's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- 50% of the business is held by the top 10 shareholders
- Institutions own 12% of Tachikawa
Every investor in Tachikawa Corporation (TSE:7989) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 43% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, individual investors collectively scored the highest last week as the company hit JP¥37b market cap following a 11% gain in the stock.
In the chart below, we zoom in on the different ownership groups of Tachikawa.
View our latest analysis for Tachikawa
What Does The Institutional Ownership Tell Us About Tachikawa?
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 Tachikawa. 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 Tachikawa, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Tachikawa. Our data shows that Tachikawa Kosan Y.K. is the largest shareholder with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.1% and 6.6% of the stock.
We did some more digging and found that 10 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Tachikawa
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.
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 Tachikawa Corporation. As individuals, the insiders collectively own JP¥1.9b worth of the JP¥37b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 43% 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.
Private Company Ownership
Our data indicates that Private Companies hold 21%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Tachikawa (of which 1 is significant!) you should know about.
Of course this may not be the best stock to buy. So take a peek at this free 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.
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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.