Key Insights

• The considerable ownership by individual investors in SGS indicates that they collectively have a greater say in management and business strategy

• 46% of the business is held by the top 25 shareholders

• Institutional ownership in SGS is 34%

A look at the shareholders of SGS SA (VTX:SGSN) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 3.1% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 34% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of SGS.

View our latest analysis for SGS

What Does The Institutional Ownership Tell Us About SGS?

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.

As you can see, institutional investors have a fair amount of stake in SGS. 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 SGS, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in SGS. Groupe Bruxelles Lambert SA is currently the company's largest shareholder with 20% of shares outstanding. For context, the second largest shareholder holds about 5.3% of the shares outstanding, followed by an ownership of 3.1% by the third-largest shareholder.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of SGS

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.