Key Insights

• Significantly high institutional ownership implies Sociedad Química y Minera de Chile's stock price is sensitive to their trading actions
• 52% of the business is held by the top 4 shareholders
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

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. And the group that holds the biggest piece of the pie are institutions with 36% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors would probably welcome last week's 5.9% increase in the share price after a year of 26% losses as a sign that returns may to begin trending higher.

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?

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 Sociedad Química y Minera de Chile does have institutional investors; and they hold a good portion of the company's stock. 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.

Hedge funds don't have many shares in Sociedad Química y Minera de Chile. Looking at our data, we can see that the largest shareholder is Tianqi Lithium Corporation with 22% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 22% and 4.1%, of the shares outstanding, respectively.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

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.

We note our data does not show any board members 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

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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

Our data indicates that Private Companies hold 26%, of the company's shares. 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. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Be aware that Sociedad Química y Minera de Chile is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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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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.