JB Hi-Fi Limited's (ASX:JBH) largest shareholders are retail investors with 52% ownership, institutions own 48%

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Key Insights

• Significant control over JB Hi-Fi by retail investors implies that the general public has more power to influence management and governance-related decisions
• 45% of the business is held by the top 25 shareholders
• 48% of JB Hi-Fi is held by Institutions

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Every investor in JB Hi-Fi Limited (ASX:JBH) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutions, on the other hand, account for 48% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

Let's delve deeper into each type of owner of JB Hi-Fi, beginning with the chart below.

See our latest analysis for JB Hi-Fi

What Does The Institutional Ownership Tell Us About JB Hi-Fi?

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.

JB Hi-Fi already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 JB Hi-Fi, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in JB Hi-Fi. Our data shows that Australian Super Pty Ltd is the largest shareholder with 15% of shares outstanding. State Street Global Advisors, Inc. is the second largest shareholder owning 8.0% of common stock, and The Vanguard Group, Inc. holds about 6.0% of the company stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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

Insider Ownership Of JB Hi-Fi

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that JB Hi-Fi Limited insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own AU$42m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 52% of JB Hi-Fi. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand JB Hi-Fi better, we need to consider many other factors.

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

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.