What Is The Ownership Structure Like For Johnson Matthey Plc (LON:JMAT)?

Simply Wall St

Mon, Apr 18, 2022, 1:59 AM 4 min read

If you want to know who really controls Johnson Matthey Plc (LON:JMAT), then you'll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.

Johnson Matthey is a pretty big company. It has a market capitalization of UK£3.5b. Normally institutions would own a significant portion of a company this size. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Johnson Matthey.

Check out our latest analysis for Johnson Matthey

ownership-breakdown — LSE:JMAT Ownership Breakdown April 18th 2022

What Does The Institutional Ownership Tell Us About Johnson Matthey?

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.

Johnson Matthey already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Johnson Matthey's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth — LSE:JMAT Earnings and Revenue Growth April 18th 2022

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Johnson Matthey is not owned by hedge funds. BlackRock, Inc. is currently the largest shareholder, with 8.5% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.3% and 5.8%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 15 have the combined ownership of 51% 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Johnson Matthey

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. 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.

Our information suggests that Johnson Matthey Plc insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own UK£3.1m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 10% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Johnson Matthey better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Johnson Matthey .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.