Retail investors invested in Gesco SE (ETR:GSC1) copped the brunt of last week's €21m market cap decline

Key Insights

• Gesco's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 20 shareholders own 43% of the company
• Insider ownership in Gesco is 30%

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A look at the shareholders of Gesco SE (ETR:GSC1) can tell us which group is most powerful. The group holding the most number of shares in the company, around 57% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of retail investors took a hit after last week’s 13% price drop, insiders with their 30% also suffered.

In the chart below, we zoom in on the different ownership groups of Gesco.

See our latest analysis for Gesco

What Does The Institutional Ownership Tell Us About Gesco?

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.

We can see that Gesco 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. 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 Gesco's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Gesco. Norman Rentrop is currently the company's largest shareholder with 15% of shares outstanding. Stefan Heimöller is the second largest shareholder owning 15% of common stock, and Baden-Württembergische Versorgungsanstalt für Ärzte, Zahnärzte und Tierärzte holds about 3.5% of the company stock.

On studying our ownership data, we found that 20 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Gesco

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Gesco SE. It has a market capitalization of just €143m, and insiders have €43m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 57% stake in Gesco, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Gesco better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.