Stock Analysis

Romande Energie Holding SA's (VTX:HREN) last week's 4.6% decline must have disappointed state or government who have a significant stake

  •  Updated
SWX:HREN
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Every investor in Romande Energie Holding SA (VTX:HREN) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are state or government with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 4.6% decline in share price, state or government suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Romande Energie Holding.

However if you'd rather see where the opportunities and risks are within HREN's industry, you can check out our analysis on the XX Electric Utilities industry.

ownership-breakdown
SWX:HREN Ownership Breakdown September 28th 2022

What Does The Institutional Ownership Tell Us About Romande Energie Holding?

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 Romande Energie Holding does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Romande Energie Holding, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SWX:HREN Earnings and Revenue Growth September 28th 2022

We note that hedge funds don't have a meaningful investment in Romande Energie Holding. State of Vaud is currently the company's largest shareholder with 43% of shares outstanding. Groupe E SA is the second largest shareholder owning 7.7% of common stock, and Credit Suisse Investment Foundation holds about 4.4% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Romande Energie Holding

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 7.7%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Romande Energie Holding (1 is a bit unpleasant!) that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Valuation is complex, but we're helping make it simple.

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About SWX:HREN

Romande Energie Holding

Romande Energie Holding SA engages in the production, distribution, and marketing of electrical and thermal energy in Switzerland.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation1
Future Growth4
Past Performance0
Financial Health6
Dividends3

Read more about these checks in the individual report sections or in our analysis model.

Flawless balance sheet with reasonable growth potential.