Universal Music Group N.V. (AMS:UMG) insiders have significant skin in the game with 28% ownership
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The presence of institutional investors on the share registry indicates that the company has a certain degree of credibility in the investment community. However, it is also a warning sign that if multiple institutions change their view on the stock at the same time, the share price could drop fast. (Source: 'What Does The Institutional Ownership Tell Us About Universal Music Group?' section)
Investors should consider not only the ownership structure but also other information, such as analyst forecasts and earnings history, to gain a comprehensive understanding of the company's future prospects. (Source: 'Next Steps' section)
Insider ownership is significant in Universal Music Group, with insiders owning €12b worth of shares in the €42b company. This level of investment indicates that the board is well aligned with other shareholders, but also raises concerns about too much power being concentrated within this group. (Source: 'Insider Ownership Of Universal Music Group' section)
The ownership structure of Universal Music Group is comprised of individual insiders owning 28% of the company, institutions owning 21%, and the general public owning 11%. The largest shareholders are Vincent Bollore with 18%, William Ackman and Pershing Square Capital Management, L.P. with 10% each, and the top 5 shareholders controlling more than half of the company. (Source: 'Key Insights' and 'Ownership Breakdown' sections)
The general public owns 11% of Universal Music Group, private companies own 20%, and public companies own 9.9%. (Source: 'General Public Ownership', 'Private Company Ownership', and 'Public Company Ownership' sections)
Key Insights
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Significant insider control over Universal Music Group implies vested interests in company growth
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58% of the business is held by the top 5 shareholders
To get a sense of who is truly in control of Universal Music Group N.V. (AMS:UMG), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 28% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.
Let's delve deeper into each type of owner of Universal Music Group, beginning with the chart below.
See our latest analysis for Universal Music Group
What Does The Institutional Ownership Tell Us About Universal Music Group?
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.
Universal Music Group 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Universal Music Group's earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 10% of Universal Music Group. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company's largest shareholder is Vincent Bollore, with ownership of 18%. The second and third largest shareholders are William Ackman and Pershing Square Capital Management, L.P., with an equal amount of shares to their name at 10%.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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.