Salzgitter AG's (ETR:SZG) stock price dropped 7.5% last week; private companies would not be happy
In This Article:
Key Insights
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Salzgitter's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
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52% of the business is held by the top 2 shareholders
To get a sense of who is truly in control of Salzgitter AG (ETR:SZG), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And last week, private companies endured the biggest losses as the stock fell by 7.5%.
Let's take a closer look to see what the different types of shareholders can tell us about Salzgitter.
Check out our latest analysis for Salzgitter
What Does The Institutional Ownership Tell Us About Salzgitter?
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.
Salzgitter already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Salzgitter's historic earnings and revenue below, but keep in mind there's always more to the story.
Salzgitter is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Hannoversche Beteiligungsgesellschaft mit beschr?nkter Haftung with 27% of shares outstanding. For context, the second largest shareholder holds about 25% of the shares outstanding, followed by an ownership of 2.6% by the third-largest shareholder.
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 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.