Proximus PLC's (EBR:PROX) market cap dropped €77m last week; Sovereign wealth funds bore the brunt

Key Insights

• Proximus' significant sovereign wealth funds ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is Federal Holding and Investment Company with a 56% stake
• 15% of Proximus is held by Institutions

If you want to know who really controls Proximus PLC (EBR:PROX), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are sovereign wealth funds with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, sovereign wealth funds endured the biggest losses as the stock fell by 3.4%.

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

See our latest analysis for Proximus

What Does The Institutional Ownership Tell Us About Proximus?

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.

As you can see, institutional investors have a fair amount of stake in Proximus. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Proximus' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Proximus. Federal Holding and Investment Company is currently the largest shareholder, with 56% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 6.3% and 2.7% of the shares outstanding respectively, Carraun Telecom Holdings Limited and BlackRock, Inc. are the second and third largest shareholders.

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 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 Proximus

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

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

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Proximus. 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 6.3%, of the company's shares. 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. Take risks for example - Proximus has 3 warning signs (and 2 which are significant) we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.