U.S. markets open in 2 hours 35 minutes
  • S&P Futures

    4,459.25
    -15.00 (-0.34%)
     
  • Dow Futures

    34,670.00
    -79.00 (-0.23%)
     
  • Nasdaq Futures

    15,475.00
    -42.75 (-0.28%)
     
  • Russell 2000 Futures

    2,217.00
    -10.90 (-0.49%)
     
  • Crude Oil

    72.14
    -0.47 (-0.65%)
     
  • Gold

    1,763.30
    +6.60 (+0.38%)
     
  • Silver

    23.00
    +0.21 (+0.93%)
     
  • EUR/USD

    1.1786
    +0.0014 (+0.12%)
     
  • 10-Yr Bond

    1.3310
    0.0000 (0.00%)
     
  • Vix

    19.45
    +1.27 (+6.99%)
     
  • GBP/USD

    1.3795
    -0.0002 (-0.01%)
     
  • USD/JPY

    109.9660
    +0.2480 (+0.23%)
     
  • BTC-USD

    47,449.96
    -600.95 (-1.25%)
     
  • CMC Crypto 200

    1,204.00
    -29.29 (-2.37%)
     
  • FTSE 100

    7,013.74
    -13.74 (-0.20%)
     
  • Nikkei 225

    30,500.05
    +176.71 (+0.58%)
     

Could The The J. M. Smucker Company (NYSE:SJM) Ownership Structure Tell Us Something Useful?

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

A look at the shareholders of The J. M. Smucker Company (NYSE:SJM) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

J. M. Smucker is a pretty big company. It has a market capitalization of US$13b. Normally institutions would own a significant portion of a company this size. In the chart below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about J. M. Smucker.

View our latest analysis for J. M. Smucker

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About J. M. Smucker?

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 J. M. Smucker 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. 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 J. M. Smucker's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in J. M. Smucker. The Vanguard Group, Inc. is currently the largest shareholder, with 11% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 8.4% of common stock, and State Street Global Advisors, Inc. holds about 6.2% of the company stock.

After doing some more digging, we found that the top 17 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 J. M. Smucker

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

I can report that insiders do own shares in The J. M. Smucker Company. The insiders have a meaningful stake worth US$519m. I sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public holds a 13% stake in J. M. Smucker. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand J. M. Smucker better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with J. M. Smucker (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

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.

This article by Simply Wall St is general in nature. 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.

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