UCB SA's (EBR:UCB) market cap dropped €1.8b last week; individual investors who hold 37% were hit as were institutions

Key Insights

• UCB's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the business is held by the top 4 shareholders
• Institutional ownership in UCB is 34%

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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 public companies with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 34% shares weren’t spared from last week’s €1.8b market cap drop, public companies as a group suffered the maximum losses

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

View our latest analysis for UCB

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.

We can see that UCB 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. 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.

We note that hedge funds don't have a meaningful investment in UCB. Looking at our data, we can see that the largest shareholder is Financière de Tubize SA with 37% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.5% and 5.1% of the stock.

Our research also brought to light the fact that roughly 52% 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

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. 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, who are usually individual investors, hold a 30% stake in UCB. 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.

Public Company Ownership

It appears to us that public companies own 37% of UCB. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Case in point: We've spotted 2 warning signs for UCB you should be aware of.

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.

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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.