Engie Energia Chile S.A.'s (SNSE:ECL) stock price dropped 5.7% last week; public companies would not be happy

Key Insights

• Engie Energia Chile's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is Engie SA with a 60% stake
• Institutions own 17% of Engie Energia Chile

Every investor in Engie Energia Chile S.A. (SNSE:ECL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 60% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CL$1.0t last week, public companies would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Engie Energia Chile, beginning with the chart below.

Check out our latest analysis for Engie Energia Chile

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

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Engie Energia Chile 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. 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.

We note that hedge funds don't have a meaningful investment 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 Habitat S.A. is the second largest shareholder owning 2.6% of common stock, and Compass Group Chile S.A. Administradora General de Fondos holds about 2.2% of the company stock.

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

Insider Ownership Of Engie Energia Chile

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. 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.

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 23% stake in Engie Energia Chile. 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

We can see that public companies hold 60% of the Engie Energia Chile shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Engie Energia Chile is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

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.