Sumitomo Mitsui Construction Co.,Ltd.'s (TSE:1821) 13% loss last week hit both individual investors who own 56% as well as institutions

Key Insights

• The considerable ownership by retail investors in Sumitomo Mitsui ConstructionLtd indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 44% ownership
• Institutional ownership in Sumitomo Mitsui ConstructionLtd is 24%

A look at the shareholders of Sumitomo Mitsui Construction Co.,Ltd. (TSE:1821) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 24% shares weren’t spared from last week’s JP¥7.8b market cap drop, retail investors as a group suffered the maximum losses

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

Check out our latest analysis for Sumitomo Mitsui ConstructionLtd

What Does The Institutional Ownership Tell Us About Sumitomo Mitsui ConstructionLtd?

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.

Sumitomo Mitsui ConstructionLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Sumitomo Mitsui ConstructionLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Sumitomo Mitsui ConstructionLtd. Looking at our data, we can see that the largest shareholder is Aya Nomura with 7.9% of shares outstanding. Office Support Co. Ltd. is the second largest shareholder owning 5.1% of common stock, and The Vanguard Group, Inc. holds about 3.5% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Sumitomo Mitsui ConstructionLtd

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. 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.

We can see that insiders own shares in Sumitomo Mitsui Construction Co.,Ltd.. As individuals, the insiders collectively own JP¥4.4b worth of the JP¥54b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 56% of Sumitomo Mitsui ConstructionLtd. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

It seems that Private Companies own 5.1%, of the Sumitomo Mitsui ConstructionLtd stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

Public companies currently own 5.6% of Sumitomo Mitsui ConstructionLtd stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sumitomo Mitsui ConstructionLtd better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Sumitomo Mitsui ConstructionLtd (including 1 which is concerning) .

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com