Immobel SA's (EBR:IMMO) stock price dropped 8.3% last week; private companies would not be happy

By
Simply Wall St
Published
May 10, 2022
ENXTBR:IMMO
Source: Shutterstock

To get a sense of who is truly in control of Immobel SA (EBR:IMMO), it is important to understand the ownership structure of the business. With 59% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies as a group endured the highest losses last week after market cap fell by €58m.

In the chart below, we zoom in on the different ownership groups of Immobel.

Check out our latest analysis for Immobel

ownership-breakdown
ENXTBR:IMMO Ownership Breakdown May 10th 2022

What Does The Institutional Ownership Tell Us About Immobel?

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.

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

earnings-and-revenue-growth
ENXTBR:IMMO Earnings and Revenue Growth May 10th 2022

Hedge funds don't have many shares in Immobel. Looking at our data, we can see that the largest shareholder is A3 Management Bvba with 30% of shares outstanding. A³ Capital NV is the second largest shareholder owning 30% of common stock, and Janus Henderson Group plc holds about 1.9% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Immobel

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

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 34% stake in Immobel. 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.

Private Company Ownership

It seems that Private Companies own 59%, of the Immobel 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Immobel better, we need to consider many other factors. For example, we've discovered 4 warning signs for Immobel (1 is potentially serious!) that you should be aware of before investing here.

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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