Givaudan SA's (VTX:GIVN) market cap touched CHF32b last week, benefiting both individual investors who own 53% as well as institutions

Key Insights

• Significant control over Givaudan by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 41% of the company
• Institutional ownership in Givaudan is 47%

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Every investor in Givaudan SA (VTX:GIVN) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 53% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 3.0% increase in the stock price last week, individual investors profited the most, but institutions who own 47% stock also stood to gain from the increase.

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

View our latest analysis for Givaudan

What Does The Institutional Ownership Tell Us About Givaudan?

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.

As you can see, institutional investors have a fair amount of stake in Givaudan. 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 Givaudan's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Givaudan. Cascade Investment, L.L.C. is currently the largest shareholder, with 12% of shares outstanding. With 5.7% and 5.1% of the shares outstanding respectively, UBS Asset Management AG and BlackRock, Inc. are the second and third largest shareholders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Givaudan

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 most recent data indicates that insiders own less than 1% of Givaudan SA. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own CHF42m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 53% stake in Givaudan, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Givaudan , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.