The Goodyear Tire & Rubber Company's (NASDAQ:GT) market cap decline of US$199m may not have as much of an impact on institutional owners after a year of 9.9% returns

Key Insights

• Institutions' substantial holdings in Goodyear Tire & Rubber implies that they have significant influence over the company's share price
• The top 11 shareholders own 51% of the company
• Recent purchases by insiders

Every investor in The Goodyear Tire & Rubber Company (NASDAQ:GT) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 85% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 5.5% last week. However, the 9.9% one-year return to shareholders might have softened the blow. We would assume however, that they would be on the lookout for weakness in the future.

In the chart below, we zoom in on the different ownership groups of Goodyear Tire & Rubber.

Check out our latest analysis for Goodyear Tire & Rubber

What Does The Institutional Ownership Tell Us About Goodyear Tire & Rubber?

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.

As you can see, institutional investors have a fair amount of stake in Goodyear Tire & Rubber. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Goodyear Tire & Rubber's earnings history below. Of course, the future is what really matters.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Goodyear Tire & Rubber is not owned by hedge funds. Our data shows that BlackRock, Inc. is the largest shareholder with 13% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 10% of common stock, and Dimensional Fund Advisors LP holds about 5.8% of the company stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Goodyear Tire & Rubber

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that The Goodyear Tire & Rubber Company insiders own under 1% of the company. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own US$26m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 14% stake in the company, and hence can't easily be ignored. While this group can'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 who own shares in a company. But to understand Goodyear Tire & Rubber better, we need to consider many other factors. Take risks for example - Goodyear Tire & Rubber has 1 warning sign we think you should be aware of.

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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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.