Sun. Jul 14th, 2024

With 55% institutional ownership, NH Foods Ltd. (TSE:2282) a favorite among the big players

By Vaseline May30,2024

Key insights

  • Given the large stake that institutions have in the stock, NH Foods’ share price could be vulnerable to their trading decisions
  • A total of 18 investors have a majority stake in the company with 50% ownership
  • Analyst forecasts along with ownership data serve to provide a strong idea about the prospects for a company

Every investor in NH Foods Ltd. (TSE:2282) must be aware of the most powerful shareholder groups. We can see that institutions own the lion’s share of the company, with 55% ownership. That is, the group will benefit the most if the stock rises (or lose the most if there is a downturn).

Because institutional owners have a vast amount of resources and liquidity, their investment decisions often have major influence, especially among individual investors. As a result, a significant amount of institutional money invested in a company is generally seen as a positive attribute.

Let’s take a closer look at what the different types of shareholders can tell us about NH Foods.

See our latest analysis for NH Foods

property division
TSE:2282 Ownership distribution May 30, 2024

What does institutional ownership tell us about NH Foods?

Many institutions measure their performance using an index that approximates the local market. So they tend to pay more attention to companies included in the major indices.

We can see that NH Foods has institutional investors; and they own a large portion of the company’s stock. This may indicate that the company has a degree of credibility in the investment community. However, it’s best to be wary and not rely on the supposed validation that institutional investors bring. They too are wrong sometimes. It is not unusual to see a big share price drop if two large institutional investors try to sell off a stock at the same time. So it’s worth checking out NH Foods’ past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

profit and sales growth
TSE:2282 Earnings and revenue growth May 30, 2024

Institutional investors own more than 50% of the company, so together they can likely strongly influence board decisions. NH Foods is not owned by hedge funds. Our records show that Nomura Asset Management Co., Ltd. is the largest shareholder with 7.5% of the outstanding shares. For context, the second largest shareholder owns approximately 3.7% of the outstanding shares, followed by an ownership of 3.6% by the third largest shareholder.

After a little more research, we found that the top 18 collectively own 50% of the company’s shares, suggesting that no single shareholder has significant control over the company.

Institutional ownership research is a good way to measure and filter the expected performance of a stock. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are predicting as well.

Insider owned by NH Foods

The definition of corporate insiders can be subjective and varies by jurisdiction. Our data reflects individual insiders and includes, at a minimum, board members. Company management runs the company, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it indicates that leadership is 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.

Our data shows that insiders own less than 1% of NH Foods Ltd. own in his own name. It is a large company, so even a small proportional interest can create alignment between the board and the shareholders. In this case, insiders own JP¥206m worth of shares. Recent purchases and sales are undoubtedly just as important to consider. You can click here to see if insiders have been buying or selling.

General public property

The general public, mostly individual investors, has a 43% stake in NH Foods. While this group doesn’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Next steps:

It’s always worth thinking about the different groups that own shares in a company. But to better understand NH Foods, we need to take many other factors into account.

Many find it useful to take an in-depth look at how a company has performed in the past. You have access to this detailed chart of previous earnings, revenue and cash flow.

If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free reporting on analyst forecasts.

Please note: The figures in this article have been calculated based on data from the past twelve months, which relates to the twelve-month period ending on the last date of the month in which the annual accounts are dated. This may not correspond to the figures in the full annual report.

Valuation is complex, but we help make it simple.

Invent or NH Foods may be over or undervalued if you look at our comprehensive analysis, including fair value estimates, risks and cautions, dividends, insider transactions and financial health.

View the Free Analysis

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.

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