Institutions own 38% of ElringKlinger AG (ETR:ZIL2) shares but retail investors control 42% of the company

Key Insights

  • The considerable ownership by retail investors in ElringKlinger indicates that they collectively have a greater say in management and business strategy

  • 52% of the business is held by the top 3 shareholders

  • 38% of ElringKlinger is held by Institutions

To get a sense of who is truly in control of ElringKlinger AG (ETR:ZIL2), it is important to understand the ownership structure of the business. We can see that retail investors own the lion’s share in the company with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutions, on the other hand, account for 38% of the company’s stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

In the chart below, we zoom in on the different ownership groups of ElringKlinger.

Check out our latest analysis for ElringKlinger

ownership-breakdown

ownership-breakdown

What Does The Institutional Ownership Tell Us About ElringKlinger?

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.

As you can see, institutional investors have a fair amount of stake in ElringKlinger. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of ElringKlinger, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth

earnings-and-revenue-growth

We note that hedge funds don’t have a meaningful investment in ElringKlinger. Paul Lechler Stiftung gGmbH, Endowment Arm is currently the company’s largest shareholder with 32% of shares outstanding. The second and third largest shareholders are Elgarta GmbH and Lechler Beteiligungs-Gmbh, with an equal amount of shares to their name at 10%.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of ElringKlinger

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

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data cannot confirm that board members are 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 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over ElringKlinger. 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

We can see that Private Companies own 20%, of the shares on issue. 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.

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. Case in point: We’ve spotted 2 warning signs for ElringKlinger you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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