Public companies who hold 45% of Sociedad Química y Minera de Chile S.A. (NYSE:SQM) gained 7.3%, institutions profited as well

Key Insights

• Significant control over Sociedad Química y Minera de Chile by public companies implies that the general public has more power to influence management and governance-related decisions
• A total of 3 investors have a majority stake in the company with 54% ownership
• 37% of Sociedad Química y Minera de Chile is held by Institutions

To get a sense of who is truly in control of Sociedad Química y Minera de Chile S.A. (NYSE:SQM), it is important to understand the ownership structure of the business. With 45% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Public companies gained the most after market cap touched US$16b last week, while institutions who own 37% also benefitted.

In the chart below, we zoom in on the different ownership groups of Sociedad Química y Minera de Chile.

Check out our latest analysis for Sociedad Química y Minera de Chile

What Does The Institutional Ownership Tell Us About Sociedad Química y Minera de Chile?

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.

As you can see, institutional investors have a fair amount of stake in Sociedad Química y Minera de Chile. 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 Sociedad Química y Minera de Chile, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Sociedad Química y Minera de Chile. Tianqi Lithium Corporation is currently the largest shareholder, with 45% of shares outstanding. State Street Global Advisors, Inc. is the second largest shareholder owning 4.4% of common stock, and BlackRock, Inc. holds about 4.1% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Sociedad Química y Minera de Chile

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 data cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 4.6%, of the Sociedad Química y Minera de Chile 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

We can see that public companies hold 45% of the Sociedad Química y Minera de Chile shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Sociedad Química y Minera de Chile has 3 warning signs (and 2 which can't be ignored) 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.

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

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.