Institutions profited after Kimura Chemical Plants Co., Ltd.'s (TSE:6378) market cap rose JP¥2.8b last week but retail investors profited the most
Key Insights
- The considerable ownership by retail investors in Kimura Chemical Plants indicates that they collectively have a greater say in management and business strategy
- The top 25 shareholders own 43% of the company
- 16% of Kimura Chemical Plants is held by Institutions
To get a sense of who is truly in control of Kimura Chemical Plants Co., Ltd. (TSE:6378), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 57% ownership. 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¥2.8b market cap gain, institutions too had a 16% share in those profits.
Let's delve deeper into each type of owner of Kimura Chemical Plants, beginning with the chart below.
View our latest analysis for Kimura Chemical Plants
What Does The Institutional Ownership Tell Us About Kimura Chemical Plants?
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.
We can see that Kimura Chemical Plants 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 Kimura Chemical Plants, (below). Of course, keep in mind that there are other factors to consider, too.
Kimura Chemical Plants is not owned by hedge funds. Our data shows that Hikari Tsushin, Inc. is the largest shareholder with 6.0% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.7% and 4.9%, of the shares outstanding, respectively. Furthermore, CEO Yasumasa Kobayashi is the owner of 3.1% of the company's shares.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Kimura Chemical Plants
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.
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.
We can see that insiders own shares in Kimura Chemical Plants Co., Ltd.. In their own names, insiders own JP¥1.4b worth of stock in the JP¥25b company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 57% of Kimura Chemical Plants shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Private Company Ownership
We can see that Private Companies own 5.7%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Public Company Ownership
We can see that public companies hold 11% of the Kimura Chemical Plants shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Kimura Chemical Plants better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Kimura Chemical Plants (of which 1 is a bit unpleasant!) 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.