Stock Analysis

Private companies own 30% of VERBUND AG (VIE:VER) shares but state or government control 51% of the company

Published
WBAG:VER
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Key Insights

  • Significant control over VERBUND by state or government implies that the general public has more power to influence management and governance-related decisions
  • Austria owns 51% of the company
  • Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of VERBUND AG (VIE:VER), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 51% to be precise, is state or government. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And private companies on the other hand have a 30% ownership in the company.

Let's take a closer look to see what the different types of shareholders can tell us about VERBUND.

Check out our latest analysis for VERBUND

ownership-breakdown
WBAG:VER Ownership Breakdown November 29th 2023

What Does The Institutional Ownership Tell Us About VERBUND?

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.

We can see that VERBUND does have institutional investors; and they hold a good portion of the company's stock. 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. 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 VERBUND, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
WBAG:VER Earnings and Revenue Growth November 29th 2023

Hedge funds don't have many shares in VERBUND. Our data shows that Austria is the largest shareholder with 51% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. The second and third largest shareholders are Nö Holding Gmbh and Wiener Stadtwerke GmbH, with an equal amount of shares to their name at 13%.

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 VERBUND

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 30%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with VERBUND (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

Valuation is complex, but we're helping make it simple.

Find out whether VERBUND is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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