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The considerable ownership by public companies in HELLA GmbH KGaA indicates that they collectively have a greater say in management and business strategy
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The largest shareholder of the company is Forvia SE with a 82% stake
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Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in HELLA GmbH & Co. KGaA (ETR:HLE) should be aware of the most powerful shareholder groups. We can see that public companies own the lion’s share in the company with 82% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, individual investors make up 12% of the company’s shareholders.
In the chart below, we zoom in on the different ownership groups of HELLA GmbH KGaA.
View our latest analysis for HELLA GmbH KGaA
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 HELLA GmbH KGaA 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. 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 HELLA GmbH KGaA’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 HELLA GmbH KGaA. Forvia SE is currently the largest shareholder, with 82% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 3.7% and 1.7%, of the shares outstanding, respectively.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
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.
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. 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.
The general public– including retail investors — own 12% 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.
Public companies currently own 82% of HELLA GmbH KGaA stock. We can’t be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
It’s always worth thinking about the different groups who own shares in a company. But to understand HELLA GmbH KGaA better, we need to consider many other factors. For example, we’ve discovered 2 warning signs for HELLA GmbH KGaA that you should be aware of before investing here.
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.