Engie Energia Chile S.A.'s (SNSE:ECL) market cap dropped CL$59b last week; Public companies bore the brunt

Key Insights

• Engie Energia Chile's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Engie SA owns 60% of the company
• Institutional ownership in Engie Energia Chile is 20%

If you want to know who really controls Engie Energia Chile S.A. (SNSE:ECL), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 6.4% decline in share price, public companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Engie Energia Chile.

View our latest analysis for Engie Energia Chile

What Does The Institutional Ownership Tell Us About Engie Energia Chile?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

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

Hedge funds don't have many shares in Engie Energia Chile. Engie SA is currently the company's largest shareholder with 60% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Administradora de Fondos de Pensiones Provida S.A. is the second largest shareholder owning 2.6% of common stock, and Administradora de Fondos de Pensiones Habitat S.A. holds about 2.1% of the company stock.

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 Engie Energia Chile

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Engie Energia Chile. 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.

Public Company Ownership

It appears to us that public companies own 60% of Engie Energia Chile. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Engie Energia Chile has 1 warning sign we think you should be aware of.

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.

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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.