Nordex SE's (ETR:NDX1) market cap dropped €208m last week; individual investors who hold 47% were hit as were institutions
In This Article:
Key Insights
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Significant control over Nordex by public companies implies that the general public has more power to influence management and governance-related decisions
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51% of the business is held by the top 2 shareholders
A look at the shareholders of Nordex SE (ETR:NDX1) can tell us which group is most powerful. With 47% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While institutions, who own 25% shares weren’t spared from last week’s €208m market cap drop, public companies as a group suffered the maximum losses
In the chart below, we zoom in on the different ownership groups of Nordex.
View our latest analysis for Nordex
What Does The Institutional Ownership Tell Us About Nordex?
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 Nordex. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Nordex's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Nordex. The company's largest shareholder is Acciona, S.A., with ownership of 47%. Meanwhile, the second and third largest shareholders, hold 4.1% and 4.1%, of the shares outstanding, respectively.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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 Nordex
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.