The recent 16% gain must have brightened CEO Retsu Kitagawa's week, SmartDrive inc.'s (TSE:5137) most bullish insider

Key Insights

• Insiders appear to have a vested interest in SmartDrive's growth, as seen by their sizeable ownership
• 56% of the business is held by the top 2 shareholders
• Institutional ownership in SmartDrive is 21%

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If you want to know who really controls SmartDrive inc. (TSE:5137), 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 individual insiders with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 16% gain.

Let's take a closer look to see what the different types of shareholders can tell us about SmartDrive.

See our latest analysis for SmartDrive

What Does The Institutional Ownership Tell Us About SmartDrive?

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 SmartDrive 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 SmartDrive, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in SmartDrive. Looking at our data, we can see that the largest shareholder is the CEO Retsu Kitagawa with 49% of shares outstanding. The second and third largest shareholders are TJ 2015 Fund L.P. and Amova Asset Management Co., Ltd., with an equal amount of shares to their name at 7.3%.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of SmartDrive

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our information suggests that insiders maintain a significant holding in SmartDrive inc.. Insiders own JP¥7.8b worth of shares in the JP¥16b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SmartDrive. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 12%, of the SmartDrive 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. Take risks for example - SmartDrive has 1 warning sign we think 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.