VERBUND AG's (VIE:VER) market cap surged €1.5b last week, state or government who have a lot riding on the company were rewarded

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
• 51% of the company is held by a single shareholder (Austria)
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in VERBUND AG (VIE:VER) should be aware of the most powerful shareholder groups. With 51% stake, state or government possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, state or government collectively scored the highest last week as the company hit €27b market cap following a 5.9% gain in the stock.

Let's delve deeper into each type of owner of VERBUND, beginning with the chart below.

Check out our latest analysis for VERBUND

What Does The Institutional Ownership Tell Us About VERBUND?

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.

VERBUND already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at VERBUND's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in VERBUND. The company's largest shareholder is Austria, with ownership of 51%. This implies that they have majority interest control of the future of the company. The second and third largest shareholders are Wiener Stadtwerke GmbH and Nö Holding 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 company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

Our data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 30%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand VERBUND better, we need to consider many other factors. Take risks for example - VERBUND has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.