individual investors who own 55% along with institutions invested in Sumitomo Electric Industries, Ltd. (TSE:5802) saw increase in their holdings value last week

Key Insights

• Sumitomo Electric Industries' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 39% of the business is held by the top 25 shareholders
• Institutions own 44% of Sumitomo Electric Industries

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If you want to know who really controls Sumitomo Electric Industries, Ltd. (TSE:5802), then you'll have to look at the makeup of its share registry. With 55% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 13% increase in the stock price last week, individual investors profited the most, but institutions who own 44% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Sumitomo Electric Industries.

See our latest analysis for Sumitomo Electric Industries

What Does The Institutional Ownership Tell Us About Sumitomo Electric 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.

We can see that Sumitomo Electric Industries does have institutional investors; and they hold a good portion of the company's stock. 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 Electric Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Sumitomo Electric Industries. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 5.4% of shares outstanding. For context, the second largest shareholder holds about 5.2% of the shares outstanding, followed by an ownership of 3.9% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Sumitomo Electric 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.

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 Sumitomo Electric Industries, Ltd.. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own JP¥872m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 55% of Sumitomo Electric Industries. 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 Sumitomo Electric Industries better, we need to consider many other factors. Take risks for example - Sumitomo Electric Industries has 2 warning signs (and 1 which is concerning) we think you should know about.

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.