Institutions profited after Japan Electronic Materials Corporation's (TSE:6855) market cap rose JP¥4.6b last week but individual investors profited the most
Key Insights
- The considerable ownership by individual investors in Japan Electronic Materials indicates that they collectively have a greater say in management and business strategy
- A total of 15 investors have a majority stake in the company with 51% ownership
- 44% of Japan Electronic Materials is held by Institutions
If you want to know who really controls Japan Electronic Materials Corporation (TSE:6855), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Individual investors gained the most after market cap touched JP¥50b last week, while institutions who own 44% also benefitted.
Let's delve deeper into each type of owner of Japan Electronic Materials, beginning with the chart below.
See our latest analysis for Japan Electronic Materials
What Does The Institutional Ownership Tell Us About Japan Electronic Materials?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Japan Electronic Materials already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Japan Electronic Materials, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Japan Electronic Materials. Nomura Asset Management Co., Ltd. is currently the company's largest shareholder with 9.1% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.7% and 4.2%, of the shares outstanding, respectively.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Japan Electronic Materials
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.
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.
We can see that insiders own shares in Japan Electronic Materials Corporation. As individuals, the insiders collectively own JP¥4.9b worth of the JP¥50b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 46% stake in Japan Electronic Materials. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Japan Electronic Materials better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Japan Electronic Materials you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.