If you want to know who really controls Severn Trent PLC (LON:SVT), then you'll have to look at the makeup of its share registry.The group holding the most number of shares in the company, around 74% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutional investors was the group most impacted after the company's market cap fell to UK£7.8b last week.However, the 1.8% one-year returns may have helped alleviate their overall losses.But they would probably be wary of future losses.
In the chart below, we zoom in on the different ownership groups of Severn Trent.
What Does The Institutional Ownership Tell Us About Severn Trent?
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.
Severn Trent 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.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 Severn Trent, (below). Of course, keep in mind that there are other factors to consider, too.
LSE:SVT Earnings and Revenue Growth December 11th 2024
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences.Hedge funds don't have many shares in Severn Trent.Our data shows that Qatar Holding LLC is the largest shareholder with 12% of shares outstanding.In comparison, the second and third largest shareholders hold about 8.3% and 5.3% of the stock.
After doing some more digging, we found that the top 12 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over the company.
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.Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Severn Trent
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.
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 Severn Trent PLC insiders own under 1% of the company.It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own UK£14m worth of shares (at current prices).It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Severn Trent.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 Equity Ownership
Private equity firms hold a 12% stake in Severn Trent. This suggests they can be influential in key policy decisions.Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Severn Trent better, we need to consider many other factors.Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Severn Trent (of which 2 don't sit too well with us!) 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.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.
