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Key Insights

• Significant control over Gesco by retail investors implies that the general public has more power to influence management and governance-related decisions

• The top 22 shareholders own 43% of the company

• 14% of Gesco is held by insiders

Every investor in Gesco SE (ETR:GSC1) should be aware of the most powerful shareholder groups. With 57% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And institutions on the other hand have a 29% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

Let's take a closer look to see what the different types of shareholders can tell us about Gesco.

Check out our latest analysis for Gesco

What Does The Institutional Ownership Tell Us About Gesco?

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.

We can see that Gesco does have institutional investors; and they hold a good portion of the company's stock. 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 Gesco's historic earnings and revenue below, but keep in mind there's always more to the story.

Gesco is not owned by hedge funds. Investmentaktiengesellschaft für langfristige Investoren TGV is currently the largest shareholder, with 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 3.3%, of the shares outstanding, respectively.

Our studies suggest that the top 22 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.