Could The JPMorgan Chase & Co. (NYSE:JPM) Ownership Structure Tell Us Something Useful?

Every investor in JPMorgan Chase & Co. (NYSE:JPM) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

JPMorgan Chase is a pretty big company. It has a market capitalization of US$415b. Normally institutions would own a significant portion of a company this size. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about JPMorgan Chase.

See our latest analysis for JPMorgan Chase

NYSE:JPM Ownership Summary, February 3rd 2020
NYSE:JPM Ownership Summary, February 3rd 2020

What Does The Institutional Ownership Tell Us About JPMorgan Chase?

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.

As you can see, institutional investors own 72% of JPMorgan Chase. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 JPMorgan Chase’s earnings history, below. Of course, the future is what really matters.

NYSE:JPM Income Statement, February 3rd 2020
NYSE:JPM Income Statement, February 3rd 2020

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don’t have many shares in JPMorgan Chase. The Vanguard Group, Inc. is currently the company’s largest shareholder with 8.0% of shares outstanding. BlackRock, Inc. is the second largest shareholder with 6.7% of common stock, followed by State Street Global Advisors, Inc., holding 4.7% of the stock.

On studying our ownership data, we found that 17 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of JPMorgan Chase

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own less than 1% of JPMorgan Chase & Co.. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$3.0b of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 25% ownership, the general public have some degree of sway over JPM. 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:

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. Case in point: We’ve spotted 1 warning sign for JPMorgan Chase 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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