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ElringKlinger’s significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
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52% of the business is held by the top 3 shareholders
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. With 44% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 36% of the company’s stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
Let’s take a closer look to see what the different types of shareholders can tell us about ElringKlinger.
View our latest analysis for 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.
We can see that ElringKlinger does have institutional investors; and they hold a good portion of the company’s 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at ElringKlinger’s earnings history below. Of course, the future is what really matters.
We note that hedge funds don’t have a meaningful investment in ElringKlinger. Paul Lechler Stiftung gGmbH, Endowment Arm is currently the 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.
Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
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.
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.
We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.
With a 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over ElringKlinger. 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.
Our data indicates that Private Companies hold 20%, of the company’s shares. 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.
It’s always worth thinking about the different groups who own shares in a company. But to understand ElringKlinger better, we need to consider many other factors. Be aware that ElringKlinger is showing 1 warning sign in our investment analysis , you should know about…
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.