Could The Sonoco Products Company (NYSE:SON) Ownership Structure Tell Us Something Useful?

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If you want to know who really controls Sonoco Products Company (NYSE:SON), then you’ll have to look at the makeup of its share registry. 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.

Sonoco Products is a pretty big company. It has a market capitalization of US$6.6b. Normally institutions would own a significant portion of a company this size. In the chart below below, we can see that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about SON.

View our latest analysis for Sonoco Products

NYSE:SON Ownership Summary, July 4th 2019
NYSE:SON Ownership Summary, July 4th 2019

What Does The Institutional Ownership Tell Us About Sonoco Products?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Sonoco Products already has institutions on the share registry. Indeed, they own 76% of 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. 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 Sonoco Products, (below). Of course, keep in mind that there are other factors to consider, too.

NYSE:SON Income Statement, July 4th 2019
NYSE:SON Income Statement, July 4th 2019

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Sonoco Products is not owned by hedge funds. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Sonoco Products

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.

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.

I can report that insiders do own shares in Sonoco Products Company. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$128m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, with a 22% stake in the company, will not easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

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.

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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