Institutional investors own a significant stake of 44% in SGL Carbon SE (ETR:SGL)

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editorial-team@simplywallst.com (Simply Wall St)

Mon, May 20, 2024, 10:05 PM 4 min read

What Does The Institutional Ownership Tell Us About SGL Carbon?

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.

SGL Carbon already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 SGL Carbon's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — XTRA:SGL Earnings and Revenue Growth May 21st 2024

SGL Carbon is not owned by hedge funds. The company's largest shareholder is SKion GmbH, with ownership of 28%. For context, the second largest shareholder holds about 18% of the shares outstanding, followed by an ownership of 7.4% by the third-largest shareholder.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of SGL Carbon

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that SGL Carbon SE insiders own under 1% of the company. It appears that the board holds about €2.5m worth of stock. This compares to a market capitalization of €862m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SGL Carbon. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 26% of SGL Carbon. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with SGL Carbon .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.