While institutions invested in ShinMaywa Industries, Ltd. (TSE:7224) benefited from last week's 6.7% gain, individual investors stood to gain the most

Key Insights

• The considerable ownership by individual investors in ShinMaywa Industries indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 44% of the company
• 33% of ShinMaywa Industries is held by Institutions

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A look at the shareholders of ShinMaywa Industries, Ltd. (TSE:7224) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that reaped the most benefits after last week’s 6.7% price gain, institutions also received a 33% cut.

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

Check out our latest analysis for ShinMaywa Industries

What Does The Institutional Ownership Tell Us About ShinMaywa Industries?

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.

As you can see, institutional investors have a fair amount of stake in ShinMaywa Industries. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at ShinMaywa Industries' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in ShinMaywa Industries. Sanshin Co., Ltd. is currently the largest shareholder, with 10% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.0% and 3.0% of the stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of ShinMaywa Industries

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 data suggests that insiders own under 1% of ShinMaywa Industries, Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It has a market capitalization of just JP¥135b, and the board has only JP¥333m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 55% of ShinMaywa Industries. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

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 1 warning sign for ShinMaywa Industries that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.