Sumitomo Metal Mining Co., Ltd. (TSE:5713) surges 3.9%; individual investors who own 53% shares profited along with institutions

Key Insights

• Sumitomo Metal Mining's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 44% ownership
• Institutional ownership in Sumitomo Metal Mining is 42%

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Every investor in Sumitomo Metal Mining Co., Ltd. (TSE:5713) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 53% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 3.9% increase in the stock price last week, individual investors profited the most, but institutions who own 42% stock also stood to gain from the increase.

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

See our latest analysis for Sumitomo Metal Mining

What Does The Institutional Ownership Tell Us About Sumitomo Metal Mining?

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 Metal Mining 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 Metal Mining'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 Metal Mining. BlackRock, Inc. is currently the largest shareholder, with 7.6% of shares outstanding. For context, the second largest shareholder holds about 6.1% of the shares outstanding, followed by an ownership of 4.1% by the third-largest shareholder.

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.

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

Insider Ownership Of Sumitomo Metal Mining

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.

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 data suggests that insiders own under 1% of Sumitomo Metal Mining Co., Ltd. in their own names. 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¥187m 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 53% of Sumitomo Metal Mining. 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.

Public Company Ownership

It appears to us that public companies own 5.5% of Sumitomo Metal Mining. 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 Metal Mining better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Sumitomo Metal Mining (including 1 which doesn't sit too well with us) .

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.