While institutions own 47% of Niterra Co., Ltd. (TSE:5334), individual investors are its largest shareholders with 50% ownership
Key Insights
- Niterra's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- A total of 25 investors have a majority stake in the company with 48% ownership
- 47% of Niterra is held by Institutions
Every investor in Niterra Co., Ltd. (TSE:5334) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And institutions on the other hand have a 47% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
Let's take a closer look to see what the different types of shareholders can tell us about Niterra.
See our latest analysis for Niterra
What Does The Institutional Ownership Tell Us About Niterra?
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.
As you can see, institutional investors have a fair amount of stake in Niterra. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Niterra's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Niterra. The company's largest shareholder is Meiji Yasuda Life Insurance Company, with ownership of 8.5%. With 8.4% and 3.9% of the shares outstanding respectively, Dai-ichi Life Holdings, Inc. and The Vanguard Group, Inc. are the second and third largest shareholders.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Niterra
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.
Our data suggests that insiders own under 1% of Niterra Co., Ltd. in their own names. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own JP¥694m worth of shares. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 50% of Niterra shares. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Niterra better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Niterra , and understanding them should be part of your investment process.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.