Sumitomo Rubber Industries, Ltd.'s (TSE:5110) largest shareholders are retail investors with 38% ownership, institutions own 33%

Key Insights

• Sumitomo Rubber Industries' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 7 investors have a majority stake in the company with 51% ownership
• 33% of Sumitomo Rubber Industries is held by Institutions

To get a sense of who is truly in control of Sumitomo Rubber Industries, Ltd. (TSE:5110), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 38% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Institutions, on the other hand, account for 33% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.

In the chart below, we zoom in on the different ownership groups of Sumitomo Rubber Industries.

View our latest analysis for Sumitomo Rubber Industries

What Does The Institutional Ownership Tell Us About Sumitomo Rubber Industries?

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 Sumitomo Rubber Industries. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Sumitomo Rubber Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Sumitomo Rubber Industries. Sumitomo Electric Industries, Ltd. is currently the largest shareholder, with 29% of shares outstanding. With 11% and 2.7% of the shares outstanding respectively, Silchester International Investors LLP and The Vanguard Group, Inc. are the second and third largest shareholders.

We also observed that the top 7 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 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 Sumitomo Rubber Industries

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 less than 1% of Sumitomo Rubber Industries, Ltd.. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around JP¥430m worth of shares (at current prices). 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 38% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

Public companies currently own 29% of Sumitomo Rubber Industries stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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 3 warning signs for Sumitomo Rubber Industries you should be aware of.

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.

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.