Institutions' substantial holdings in Invinity Energy Systems implies that they have significant influence over the company's share price
A total of 4 investors have a majority stake in the company with 52% ownership
Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
A look at the shareholders of Invinity Energy Systems plc (LON:IES) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 66% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
After a year of 51% losses, last week’s 28% gain would be welcomed by institutional investors as a possible sign that returns might start trending higher.
In the chart below, we zoom in on the different ownership groups of Invinity Energy Systems.
What Does The Institutional Ownership Tell Us About Invinity Energy Systems?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Invinity Energy Systems already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Invinity Energy Systems' historic earnings and revenue below, but keep in mind there's always more to the story.
AIM:IES Earnings and Revenue Growth November 6th 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 Invinity Energy Systems. The company's largest shareholder is Uk Infrastructure Bank Limited, Asset Management Arm, with ownership of 25%. In comparison, the second and third largest shareholders hold about 19% and 4.6% of the stock.
Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Invinity Energy Systems
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.
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 Invinity Energy Systems plc. It has a market capitalization of just UK£82m, and insiders have UK£1.9m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 28% stake in Invinity Energy Systems. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
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 risks, for instance. Every company has them, and we've spotted 2 warning signs for Invinity Energy Systems you should know about.
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.
