Dr. Hönle AG (ETR:HNL) surges 14%; retail investors who own 59% shares profited along with institutions

Key Insights

• The considerable ownership by retail investors in Dr. Hönle indicates that they collectively have a greater say in management and business strategy
• The top 19 shareholders own 41% of the company
• Institutions own 21% of Dr. Hönle

A look at the shareholders of Dr. Hönle AG (ETR:HNL) can tell us which group is most powerful. The group holding the most number of shares in the company, around 59% 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).

Following a 14% increase in the stock price last week, retail investors profited the most, but institutions who own 21% stock also stood to gain from the increase.

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

See our latest analysis for Dr. Hönle

What Does The Institutional Ownership Tell Us About Dr. Hönle?

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.

We can see that Dr. Hönle 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 Dr. Hönle, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Dr. Hönle. Zweiunddreisigste PMB Management GmbH is currently the largest shareholder, with 20% of shares outstanding. Teslin Capital Management BV is the second largest shareholder owning 6.3% of common stock, and Lazard Frères Gestion SAS holds about 3.9% of the company stock.

Our studies suggest that the top 19 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Dr. Hönle

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.

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 information suggests that Dr. Hönle AG insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It has a market capitalization of just €110m, and the board has only €3.3k worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 59% of Dr. Hönle shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 20%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Dr. Hönle you should know about.

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.

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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.