Public companies among Sumitomo Densetsu Co.,Ltd.'s (TSE:1949) largest stockholders and were hit after last week's 3.5% price drop

Key Insights

• Sumitomo DensetsuLtd's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is Sumitomo Electric Industries, Ltd. with a 51% stake
• 12% of Sumitomo DensetsuLtd is held by Institutions

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If you want to know who really controls Sumitomo Densetsu Co.,Ltd. (TSE:1949), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 3.5% decline in share price, public companies suffered the most losses.

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

View our latest analysis for Sumitomo DensetsuLtd

What Does The Institutional Ownership Tell Us About Sumitomo DensetsuLtd?

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.

We can see that Sumitomo DensetsuLtd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 DensetsuLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Sumitomo DensetsuLtd. Sumitomo Electric Industries, Ltd. is currently the largest shareholder, with 51% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 2.1% of the shares outstanding, followed by an ownership of 1.8% by the third-largest 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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Sumitomo DensetsuLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 data suggests that insiders own under 1% of Sumitomo Densetsu Co.,Ltd. in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. 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¥697m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

It appears to us that public companies own 51% of Sumitomo DensetsuLtd. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

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

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.