Empresa Nacional de Telecomunicaciones S.A.'s (SNSE:ENTEL) market cap surged CL$53b last week, public companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Empresa Nacional de Telecomunicaciones by public companies implies that the general public has more power to influence management and governance-related decisions
• 55% of the company is held by a single shareholder (Almendral S.A.)
• 19% of Empresa Nacional de Telecomunicaciones is held by Institutions

To get a sense of who is truly in control of Empresa Nacional de Telecomunicaciones S.A. (SNSE:ENTEL), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 56% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies were the biggest beneficiaries of last week’s 5.9% gain.

In the chart below, we zoom in on the different ownership groups of Empresa Nacional de Telecomunicaciones.

See our latest analysis for Empresa Nacional de Telecomunicaciones

What Does The Institutional Ownership Tell Us About Empresa Nacional de Telecomunicaciones?

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.

Empresa Nacional de Telecomunicaciones already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Empresa Nacional de Telecomunicaciones' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Empresa Nacional de Telecomunicaciones. The company's largest shareholder is Almendral S.A., with ownership of 55%. This implies that they have majority interest control of the future of the company. With 4.1% and 2.9% of the shares outstanding respectively, Administradora de Fondos de Pensiones Habitat S.A. and Administradora de Fondos de Pensiones Provida S.A. are the second and third largest shareholders.

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

Insider Ownership Of Empresa Nacional de Telecomunicaciones

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We note our data does not show any board members 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, who are usually individual investors, hold a 25% stake in Empresa Nacional de Telecomunicaciones. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 56% of Empresa Nacional de Telecomunicaciones. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Empresa Nacional de Telecomunicaciones better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 5 warning signs for Empresa Nacional de Telecomunicaciones you should know about.

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.