Given the large stake in the stock by institutions, Sociedad Química y Minera de Chile's stock price might be vulnerable to their trading decisions
51% of the business is held by the top 3 shareholders
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
Every investor in Sociedad Química y Minera de Chile S.A. (NYSE:SQM) should be aware of the most powerful shareholder groups. With 35% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Last week's US$426m market cap gain would probably be appreciated by institutional investors, especially after a year of 15% losses.
Let's delve deeper into each type of owner of Sociedad Química y Minera de Chile, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Sociedad Química y Minera de Chile?
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.
As you can see, institutional investors have a fair amount of stake in Sociedad Química y Minera de Chile. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Sociedad Química y Minera de Chile's historic earnings and revenue below, but keep in mind there's always more to the story.
NYSE:SQM Earnings and Revenue Growth October 28th 2024
Hedge funds don't have many shares in Sociedad Química y Minera de Chile. The company's largest shareholder is Inversiones SQYA S.A, with ownership of 25%. With 22% and 4.2% of the shares outstanding respectively, Tianqi Lithium Corporation and State Street Global Advisors, Inc. are the second and third largest shareholders.
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 51% 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. 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.
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. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.
General Public Ownership
The general public, who are usually individual investors, hold a 17% stake in Sociedad Química y Minera de Chile. 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.
Private Company Ownership
It seems that Private Companies own 26%, 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
Public companies currently own 22% of Sociedad Química y Minera de Chile stock. 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 Sociedad Química y Minera de Chile better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Sociedad Química y Minera de Chile (of which 2 are significant!) you should know about.
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.
