While institutions invested in The Swatch Group AG (VTX:UHR) benefited from last week's 5.9% gain, retail investors stood to gain the most

Key Insights

• The considerable ownership by retail investors in Swatch Group indicates that they collectively have a greater say in management and business strategy
• A total of 14 investors have a majority stake in the company with 50% ownership
• Institutional ownership in Swatch Group is 33%

If you want to know who really controls The Swatch Group AG (VTX:UHR), 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 retail investors with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that benefitted the most from last week’s CHF472m market cap gain, institutions too had a 33% share in those profits.

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

See our latest analysis for Swatch Group

What Does The Institutional Ownership Tell Us About Swatch Group?

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.

We can see that Swatch Group does have institutional investors; and they hold a good portion of the company's stock. 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 Swatch Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Swatch Group. Looking at our data, we can see that the largest shareholder is Estate of N.G Hayek with 23% of shares outstanding. With 8.9% and 5.8% of the shares outstanding respectively, Brandes Investment Partners, LP and UBS Asset Management AG are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Swatch Group

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.

We can see that insiders own shares in The Swatch Group AG. The insiders have a meaningful stake worth CHF219m. Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 23%, 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 Swatch Group better, we need to consider many other factors. For instance, we've identified 2 warning signs for Swatch Group that 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.