To get a sense of who is truly in control of Alfen N.V. (AMS:ALFEN), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And institutions on the other hand have a 42% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of Alfen.
ENXTAM:ALFEN Ownership Breakdown November 11th 2024
What Does The Institutional Ownership Tell Us About Alfen?
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.
As you can see, institutional investors have a fair amount of stake in Alfen. 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. 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 Alfen, (below). Of course, keep in mind that there are other factors to consider, too.
ENXTAM:ALFEN Earnings and Revenue Growth November 11th 2024
We note that hedge funds don't have a meaningful investment in Alfen. The company's largest shareholder is BlackRock, Inc., with ownership of 5.5%. For context, the second largest shareholder holds about 3.7% of the shares outstanding, followed by an ownership of 3.3% 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.
Insider Ownership Of Alfen
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.
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.
Our most recent data indicates that insiders own less than 1% of Alfen N.V.. It appears that the board holds about €1.4m worth of stock. This compares to a market capitalization of €254m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 57% of Alfen shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Alfen better, we need to consider many other factors. For instance, we've identified 2 warning signs for Alfen (1 is concerning) that you should be aware of.
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.
