To get a sense of who is truly in control of Nittetsu Mining Co., Ltd. (TSE:1515), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 40% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While retail investors were the group that benefitted the most from last week’s JP¥14b market cap gain, institutions too had a 35% share in those profits.
Let's take a closer look to see what the different types of shareholders can tell us about Nittetsu Mining.
See our latest analysis for Nittetsu Mining
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.
Nittetsu Mining already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Nittetsu Mining, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Nittetsu Mining. Nippon Steel Corporation is currently the company's largest shareholder with 10% of shares outstanding. With 9.1% and 8.1% of the shares outstanding respectively, Continental General Insurance Company and Nittetsu Kogyo Shogakukai are the second and third largest shareholders.
We also observed that the top 10 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 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 Nittetsu Mining Co., Ltd. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own JP¥402m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Nittetsu Mining. 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.
It seems that Private Companies own 15%, of the Nittetsu Mining stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
We can see that public companies hold 10% of the Nittetsu Mining 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Nittetsu Mining better, we need to consider many other factors. For instance, we've identified 2 warning signs for Nittetsu Mining that you should be aware of.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.