After losing 5.9% in the past year, UCB SA (EBR:UCB) institutional owners must be relieved by the recent gain

Published
June 27, 2022
ENXTBR:UCB
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A look at the shareholders of UCB SA (EBR:UCB) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors would appreciate the 3.1% increase in share prices last week, given their one-year returns have been disappointing at 5.9%.

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

See our latest analysis for UCB

ownership-breakdown
ENXTBR:UCB Ownership Breakdown June 27th 2022

What Does The Institutional Ownership Tell Us About UCB?

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.

UCB 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 UCB's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
ENXTBR:UCB Earnings and Revenue Growth June 27th 2022

Hedge funds don't have many shares in UCB. Our data shows that Financière de Tubize SA is the largest shareholder with 36% of shares outstanding. Wellington Management Group LLP is the second largest shareholder owning 8.0% of common stock, and FMR LLC holds about 5.0% of the company stock.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. 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 UCB

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.

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. 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

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over UCB. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

It appears to us that public companies own 36% of UCB. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand UCB better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for UCB 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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