Do Directors Own Smith & Nephew plc (LON:SN.) Shares?

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A look at the shareholders of Smith & Nephew plc (LON:SN.) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.

Smith & Nephew is a pretty big company. It has a market capitalization of UK£14b. Normally institutions would own a significant portion of a company this size. In the chart below below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about SN..

Check out our latest analysis for Smith & Nephew

What Does The Institutional Ownership Tell Us About Smith & Nephew?

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 Smith & Nephew does have institutional investors; and they hold 88% of the stock. 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 Smith & Nephew's historic earnings and revenue, below, but keep in mind there's always more to the story.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Smith & Nephew. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Smith & Nephew

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.