Individual investors are Clariant AG's (VTX:CLN) biggest owners and were rewarded after market cap rose by CHF288m last week

By
Simply Wall St
Published
March 23, 2022
SWX:CLN
Source: Shutterstock

To get a sense of who is truly in control of Clariant AG (VTX:CLN), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, individual investors collectively scored the highest last week as the company hit CHF5.4b market cap following a 5.6% gain in the stock.

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

Check out our latest analysis for Clariant

ownership-breakdown
SWX:CLN Ownership Breakdown March 23rd 2022

What Does The Institutional Ownership Tell Us About Clariant?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Clariant does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Clariant, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SWX:CLN Earnings and Revenue Growth March 23rd 2022

Clariant is not owned by hedge funds. Saudi Arabian Oil Company is currently the largest shareholder, with 32% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 3.8% of common stock, and Blue Beteiligungsgesellschaft mbH holds about 3.5% of the company stock.

We did some more digging and found that 7 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Clariant

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 report that insiders do own shares in Clariant AG. The insiders have a meaningful stake worth CHF130m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Clariant. 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 3.5%, 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.

Public Company Ownership

We can see that public companies hold 32% of the Clariant shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for Clariant (1 is concerning) 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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