With 71% ownership, Leclanché SA (VTX:LECN) boasts of strong institutional backing
Simply Wall St
4 min read
Key Insights
Given the large stake in the stock by institutions, Leclanché's stock price might be vulnerable to their trading decisions
69% of the business is held by the top 2 shareholders
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
Every investor in Leclanché SA (VTX:LECN) should be aware of the most powerful shareholder groups. With 71% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's take a closer look to see what the different types of shareholders can tell us about Leclanché.
What Does The Institutional Ownership Tell Us About Leclanché?
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 Leclanché 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 Leclanché's earnings history below. Of course, the future is what really matters.
SWX:LECN Earnings and Revenue Growth September 1st 2023
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Leclanché is not owned by hedge funds. Finexis S.A. is currently the company's largest shareholder with 46% of shares outstanding. In comparison, the second and third largest shareholders hold about 23% and 11% of the stock.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 69% stake.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Leclanché
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our data suggests that insiders own under 1% of Leclanché SA in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It seems the board members have no more than CHF4.1k worth of shares in the CHF298m company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 18% stake in Leclanché. 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
It seems that Private Companies own 11%, of the Leclanché stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Leclanché better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 5 warning signs for Leclanché you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.
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.
