Yahoo Finance Private companies in Salzgitter AG (ETR:SZG) are its biggest bettors, and their bets paid off as stock gained 4.7% last week
Key Insights
Significant control over Salzgitter by private companies implies that the general public has more power to influence management and governance-related decisions
A total of 2 investors have a majority stake in the company with 52% ownership
Every investor in Salzgitter AG (ETR:SZG) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, private companies collectively scored the highest last week as the company hit €1.8b market cap following a 4.7% gain in the stock.
In the chart below, we zoom in on the different ownership groups of Salzgitter.
See our latest analysis for Salzgitter
What Does The Institutional Ownership Tell Us About Salzgitter?
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.
As you can see, institutional investors have a fair amount of stake in Salzgitter. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Salzgitter, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Salzgitter. Hannoversche Beteiligungsgesellschaft mit beschränkter Haftung is currently the largest shareholder, with 27% of shares outstanding. In comparison, the second and third largest shareholders hold about 25% and 3.3% of the stock.
To make our study more interesting, we found that the top 2 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Salzgitter
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Shareholders would probably be interested to learn that insiders own shares in Salzgitter AG. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around €61m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Salzgitter. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
We can see that Private Companies own 52%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Salzgitter is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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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