Private equity firms who hold 35% of Highlight Event and Entertainment AG (VTX:HLEE) gained 11%, insiders profited as well

By
Simply Wall St
Published
February 23, 2022
SWX:HLEE
Source: Shutterstock

A look at the shareholders of Highlight Event and Entertainment AG (VTX:HLEE) can tell us which group is most powerful. The group holding the most number of shares in the company, around 35% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).

While private equity firms were the group that benefitted the most from last week’s CHF26m market cap gain, insiders too had a 26% share in those profits.

Let's delve deeper into each type of owner of Highlight Event and Entertainment, beginning with the chart below.

See our latest analysis for Highlight Event and Entertainment

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SWX:HLEE Ownership Breakdown February 23rd 2022

What Does The Lack Of Institutional Ownership Tell Us About Highlight Event and Entertainment?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Highlight Event and Entertainment might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

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SWX:HLEE Earnings and Revenue Growth February 23rd 2022

We note that hedge funds don't have a meaningful investment in Highlight Event and Entertainment. Our data shows that Swiss International Investment Portfolio Ag is the largest shareholder with 26% of shares outstanding. With 19% and 8.8% of the shares outstanding respectively, Bernhard Burgener and Obotritia Capital KGaA are the second and third largest shareholders. Bernhard Burgener, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 3 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Highlight Event and Entertainment

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Highlight Event and Entertainment AG. Insiders own CHF72m worth of shares in the CHF274m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 18% 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 Equity Ownership

With a stake of 35%, private equity firms could influence the Highlight Event and Entertainment board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 17%, of the Highlight Event and Entertainment stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Highlight Event and Entertainment better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Highlight Event and Entertainment (of which 2 don't sit too well with us!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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