Do Directors Own Ubisoft Entertainment SA (EPA:UBI) Shares?

The big shareholder groups in Ubisoft Entertainment SA (EPA:UBI) have power over 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. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of €8.7b, Ubisoft Entertainment is rather large. We’d expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. In the chart below, we can see that institutions own shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about Ubisoft Entertainment.

View our latest analysis for Ubisoft Entertainment

ENXTPA:UBI Ownership Summary, February 12th 2020
ENXTPA:UBI Ownership Summary, February 12th 2020

What Does The Institutional Ownership Tell Us About Ubisoft Entertainment?

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 own 63% of Ubisoft Entertainment. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. 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 Ubisoft Entertainment’s historic earnings and revenue, below, but keep in mind there’s always more to the story.

ENXTPA:UBI Income Statement, February 12th 2020
ENXTPA:UBI Income Statement, February 12th 2020

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Ubisoft Entertainment is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Guillemot Brothers S.A. with 14% of shares outstanding. With 12% and 11% of the shares outstanding respectively, Amundi Asset Management and JPMorgan Chase & Co, Brokerage and Securities Investments are the second and third largest shareholders.

On further inspection, we found that 50% of the share register is owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Ubisoft Entertainment

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.

We can see that insiders own shares in Ubisoft Entertainment SA. Insiders own €197m worth of shares (at current prices). I sometimes take an interest in whether they have been buying or selling.

General Public Ownership

With a 12% ownership, the general public have some degree of sway over UBI. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 14%, of the UBI stock. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

It appears to us that public companies own 5.0% of UBI. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Ubisoft Entertainment is showing 2 warning signs in our investment analysis , and 1 of those is significant…

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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