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Oct 18, 2024

Makino Milling Machine Co., Ltd.'s (TSE:6135) 5.4% loss last week hit both individual investors who own 50% as well as institutions - Simply Wall St News

To get a sense of who is truly in control of Makino Milling Machine Co., Ltd. (TSE:6135), it is important to understand the ownership structure of the business. With 50% stake, retail investors

To get a sense of who is truly in control of Makino Milling Machine Co., Ltd. (TSE:6135), it is important to understand the ownership structure of the business. With 50% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 44% came under pressure after market cap dropped to JP¥140b last week,retail investors took the most losses.

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

See our latest analysis for Makino Milling Machine

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.

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

Makino Milling Machine is not owned by hedge funds. Our data shows that Nikko Asset Management Co., Ltd. is the largest shareholder with 5.7% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.9% and 3.8%, of the shares outstanding, respectively.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

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.

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.

Our most recent data indicates that insiders own some shares in Makino Milling Machine Co., Ltd.. In their own names, insiders own JP¥3.1b worth of stock in the JP¥140b 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.

The general public, who are usually individual investors, hold a 50% stake in Makino Milling Machine. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

It seems that Private Companies own 3.8%, of the Makino Milling Machine stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

It's always worth thinking about the different groups who own shares in a company. But to understand Makino Milling Machine 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 Makino Milling Machine , and understanding them should be part of your investment process.

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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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.

Engages in the manufacture and sale of machine tools in Japan, China, rest of Asia, the United States, rest of Americas, Europe, and internationally.

Undervalued with excellent balance sheet.