What does the ownership structure of Archer-Daniels-Midland (NYSE: ADM) look like?

Every investor in Archer-Daniels-Midland Company (NYSE: ADM) should know the most powerful shareholder groups. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that were previously publicly owned tend to have less insider ownership.

Archer-Daniels-Midland is a pretty big company. It has a market cap of US$39 billion. Normally, institutions own a significant share of a business of this size. In the graph below, we can see that the institutions are visible on the share register. We can zoom in on the different ownership groups, to learn more about Archer-Daniels-Midland.

Check out our latest analysis for Archer-Daniels-Midland

NYSE: Breakdown of ADM’s shareholding as of January 22, 2022

What does institutional ownership tell us about Archer-Daniels-Midland?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Archer-Daniels-Midland already has institutions on the share register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out the past earnings trajectory of Archer-Daniels-Midland (below). Of course, keep in mind that there are other factors to consider as well.

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NYSE: ADM Earnings and Revenue Growth January 22, 2022

Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. We note that hedge funds have no significant investment in Archer-Daniels-Midland. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 10% of the shares outstanding. State Farm Insurance Companies, Asset Management Arm is the second largest shareholder with 8.4% of common stock, and BlackRock, Inc. owns about 7.1% of the company’s stock.

A closer look at our ownership figures suggests that the top 11 shareholders hold a combined ownership of 51%, implying that no single shareholder has a majority.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. A number of analysts cover the stock, so you can look at growth forecasts quite easily.

Archer-Daniels-Midland Insider Property

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of Archer-Daniels-Midland Company. Being so large, we wouldn’t expect insiders to own a large portion of the shares. Together they own $142 million worth of stock. In this kind of situation, it may be more interesting to see whether these insiders have been buying or selling.

General public property

The general public, generally individual investors, holds 19% of the capital of Archer-Daniels-Midland. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Archer-Daniels-Midland, we need to consider many other factors. To this end, you should be aware of the 1 warning sign we spotted with Archer-Daniels-Midland.

If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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