Is Swedish Match AB (publ) (STO:SWMA) Popular Amongst Institutions?

By
Simply Wall St
Published
January 26, 2022
OM:SWMA
Source: Shutterstock

Every investor in Swedish Match AB (publ) (STO:SWMA) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

Swedish Match is a pretty big company. It has a market capitalization of kr111b. Normally institutions would own a significant portion of a company this size. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Swedish Match.

Check out our latest analysis for Swedish Match

ownership-breakdown
OM:SWMA Ownership Breakdown January 26th 2022

What Does The Institutional Ownership Tell Us About Swedish Match?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Swedish Match does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Swedish Match, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
OM:SWMA Earnings and Revenue Growth January 26th 2022

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Swedish Match is not owned by hedge funds. Our data shows that Capital Research and Management Company is the largest shareholder with 6.7% of shares outstanding. For context, the second largest shareholder holds about 6.0% of the shares outstanding, followed by an ownership of 5.2% by the third-largest shareholder.

A closer look at our ownership figures suggests that the top 18 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 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 Swedish Match

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Swedish Match AB (publ). As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own kr100m worth of shares. 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

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Swedish Match. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Swedish Match better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Swedish Match you should be aware of, and 2 of them are a bit concerning.

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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