Institutional investors control 40% of SoftBank Group Corp. (TSE:9984) and were rewarded last week after stock increased 7.2%

Key Insights

• Given the large stake in the stock by institutions, SoftBank Group's stock price might be vulnerable to their trading decisions
• The top 4 shareholders own 50% of the company
• Insiders own 34% of SoftBank Group

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A look at the shareholders of SoftBank Group Corp. (TSE:9984) can tell us which group is most powerful. The group holding the most number of shares in the company, around 40% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And things are looking up for institutional investors after the company gained JP¥1.8t in market cap last week. The one-year return on investment is currently 103% and last week's gain would have been more than welcomed.

Let's take a closer look to see what the different types of shareholders can tell us about SoftBank Group.

See our latest analysis for SoftBank Group

What Does The Institutional Ownership Tell Us About SoftBank Group?

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.

SoftBank Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 SoftBank Group'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 SoftBank Group. The company's CEO Masayoshi Son is the largest shareholder with 34% of shares outstanding. Nomura Asset Management Co., Ltd. is the second largest shareholder owning 6.5% of common stock, and BlackRock, Inc. holds about 6.3% of the company stock.

On looking further, we found that 50% 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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of SoftBank Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own a reasonable proportion of SoftBank Group Corp.. It is very interesting to see that insiders have a meaningful JP¥9.2t stake in this JP¥27t business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that SoftBank Group is showing 4 warning signs in our investment analysis , and 3 of those are significant...

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.