Every investor in Grenke AG (ETR:GLJ) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And following last week's 4.6% decline in share price, insiders suffered the most losses.
In the chart below, we zoom in on the different ownership groups of Grenke.
What Does The Institutional Ownership Tell Us About Grenke?
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 Grenke. 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 Grenke, (below). Of course, keep in mind that there are other factors to consider, too.
XTRA:GLJ Earnings and Revenue Growth August 12th 2024
Grenke is not owned by hedge funds. The company's largest shareholder is Wolfgang Grenke, with ownership of 38%. In comparison, the second and third largest shareholders hold about 9.0% and 7.4% of the stock.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Grenke
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 information suggests that insiders maintain a significant holding in Grenke AG. It is very interesting to see that insiders have a meaningful €479m stake in this €1.2b business. 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
The general public, who are usually individual investors, hold a 19% stake in Grenke. 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.
Private Company Ownership
Our data indicates that Private Companies hold 7.4%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Grenke better, we need to consider many other factors. Be aware that Grenke is showing 2 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...
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.
