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easyJet plc's (LON:EZJ) market cap decline of UK£192m may not have as much of an impact on institutional owners after a year of 6.0% returns
Every investor in easyJet plc (LON:EZJ) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 71% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 4.6% last week. However, the 6.0% one-year return to shareholders may have helped lessen their pain. We would assume however, that they would be on the lookout for weakness in the future.
Let's take a closer look to see what the different types of shareholders can tell us about easyJet.
What Does The Institutional Ownership Tell Us About easyJet?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in easyJet. 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 easyJet, (below). Of course, keep in mind that there are other factors to consider, too.
LSE:EZJ Earnings and Revenue Growth January 7th 2025
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in easyJet. Stelios Haji-Ioannou is currently the largest shareholder, with 9.5% of shares outstanding. With 5.9% and 5.5% of the shares outstanding respectively, Polys Haji-Ioannou and UBS Asset Management AG are the second and third largest shareholders.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 16 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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 easyJet
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own a reasonable proportion of easyJet plc. It has a market capitalization of just UK£4.0b, and insiders have UK£622m worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over easyJet. 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.
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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with easyJet , and understanding them should be part of your investment process.
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.
