Institutions own 25% of Daily Journal Corporation (NASDAQ:DJCO) shares but individual investors control 42% of the company
Key Insights
Significant control over Daily Journal by individual investors implies that the general public has more power to influence management and governance-related decisions
The top 8 shareholders own 51% of the company
To get a sense of who is truly in control of Daily Journal Corporation (NASDAQ:DJCO), it is important to understand the ownership structure of the business. With 42% stake, individual investors possess the maximum shares in the company. 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 25% ownership in the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's take a closer look to see what the different types of shareholders can tell us about Daily Journal.
View our latest analysis for Daily Journal
What Does The Institutional Ownership Tell Us About Daily Journal?
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 Daily Journal. 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. 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 Daily Journal, (below). Of course, keep in mind that there are other factors to consider, too.
Our data indicates that hedge funds own 24% of Daily Journal. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. RWWM, Inc. is currently the largest shareholder, with 24% of shares outstanding. Peter Kaufman is the second largest shareholder owning 9.5% of common stock, and BlackRock, Inc. holds about 5.8% of the company stock.
We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Daily Journal
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.
Our most recent data indicates that insiders own some shares in Daily Journal Corporation. In their own names, insiders own US$43m worth of stock in the US$456m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Daily Journal. 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 Daily Journal better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.
