Painful week for retail investors invested in Furuno Electric Co., Ltd. (TSE:6814) after 4.4% drop, institutions also suffered losses
Key Insights
- Significant control over Furuno Electric by retail investors implies that the general public has more power to influence management and governance-related decisions
- 51% of the business is held by the top 16 shareholders
- 37% of Furuno Electric is held by Institutions
If you want to know who really controls Furuno Electric Co., Ltd. (TSE:6814), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While the holdings of retail investors took a hit after last week’s 4.4% price drop, institutions with their 37% holdings also suffered.
In the chart below, we zoom in on the different ownership groups of Furuno Electric.
Check out our latest analysis for Furuno Electric
What Does The Institutional Ownership Tell Us About Furuno Electric?
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.
We can see that Furuno Electric 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 Furuno Electric, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Furuno Electric. Our data shows that Furuno industries Ltd. is the largest shareholder with 13% of shares outstanding. The second and third largest shareholders are Sumitomo Mitsui Trust Asset Management Co., Ltd. and Mizuho Financial Group, Inc., with an equal amount of shares to their name at 3.6%. Additionally, the company's CEO Yukio Furuno directly holds 0.9% of the total shares outstanding.
A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
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 Furuno Electric
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can see that insiders own shares in Furuno Electric Co., Ltd.. The insiders have a meaningful stake worth JP¥3.4b. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 42% stake in the company, and hence can't easily be ignored. 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.
Private Company Ownership
It seems that Private Companies own 15%, of the Furuno Electric 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.
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 instance, we've identified 2 warning signs for Furuno Electric that 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.