Institutions' substantial holdings in HelloFresh implies that they have significant influence over the company's share price
A total of 12 investors have a majority stake in the company with 53% ownership
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
A look at the shareholders of HelloFresh SE (ETR:HFG) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Last week's €262m market cap gain would probably be appreciated by institutional investors, especially after a year of 50% losses.
Let's take a closer look to see what the different types of shareholders can tell us about HelloFresh.
What Does The Institutional Ownership Tell Us About HelloFresh?
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 HelloFresh. 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. 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 HelloFresh, (below). Of course, keep in mind that there are other factors to consider, too.
XTRA:HFG Earnings and Revenue Growth October 30th 2024
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in HelloFresh. Active Ownership Capital S.à R.L. is currently the largest shareholder, with 8.3% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.9% and 5.7%, of the shares outstanding, respectively. In addition, we found that Dominik Richter, the CEO has 5.4% of the shares allocated to their name.
After doing some more digging, we found that the top 12 have the combined ownership of 53% in the company, suggesting that no single shareholder has significant control over 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of HelloFresh
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.
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.
Shareholders would probably be interested to learn that insiders own shares in HelloFresh SE. The insiders have a meaningful stake worth €90m. Most would see this as a real positive. 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
The general public-- including retail investors -- own 25% 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.
Private Equity Ownership
With an ownership of 8.3%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for HelloFresh that you should be aware of.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport 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.
