JMDC Inc.'s (TSE:4483) last week's 3.7% decline must have disappointed public companies who have a significant stake
Key Insights
- Significant control over JMDC by public companies implies that the general public has more power to influence management and governance-related decisions
- 54% of the company is held by a single shareholder (OMRON Corporation)
- Institutions own 11% of JMDC
A look at the shareholders of JMDC Inc. (TSE:4483) can tell us which group is most powerful. The group holding the most number of shares in the company, around 59% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And last week, public companies endured the biggest losses as the stock fell by 3.7%.
Let's take a closer look to see what the different types of shareholders can tell us about JMDC.
View our latest analysis for JMDC
What Does The Institutional Ownership Tell Us About JMDC?
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.
JMDC 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 JMDC's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in JMDC. The company's largest shareholder is OMRON Corporation, with ownership of 54%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 4.7% of the shares outstanding, followed by an ownership of 1.7% by the third-largest shareholder. Yosuke Matsushima, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of JMDC
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 some shares in JMDC Inc.. The insiders have a meaningful stake worth JP¥9.0b. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 26% stake in JMDC. 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.
Public Company Ownership
We can see that public companies hold 59% of the JMDC 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:
It's always worth thinking about the different groups who own shares in a company. But to understand JMDC better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for JMDC you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.