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Key Insights

• Given the large stake in the stock by institutions, Vonovia's stock price might be vulnerable to their trading decisions

• The top 25 shareholders own 50% of the company

• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Vonovia SE (ETR:VNA), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 59% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

After a year of 40% losses, last week’s 4.7% gain would be welcomed by institutional investors as a likely sign that returns might start trending higher.

Let's delve deeper into each type of owner of Vonovia, beginning with the chart below.

View our latest analysis for Vonovia

What Does The Institutional Ownership Tell Us About Vonovia?

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 Vonovia. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Vonovia's historic earnings and revenue below, but keep in mind there's always more to the story.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Vonovia. Looking at our data, we can see that the largest shareholder is Norges Bank Investment Management with 15% of shares outstanding. For context, the second largest shareholder holds about 7.4% of the shares outstanding, followed by an ownership of 4.0% by the third-largest shareholder.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.