Dr. Hönle AG's (ETR:HNL) 12% loss last week hit both individual investors who own 59% as well as institutions

Key Insights

• The considerable ownership by individual investors in Dr. Hönle indicates that they collectively have a greater say in management and business strategy
• A total of 21 investors have a majority stake in the company with 41% ownership
• Institutional ownership in Dr. Hönle is 21%

If you want to know who really controls Dr. Hönle AG (ETR:HNL), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 59% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 12% price drop, institutions with their 21% holdings also suffered.

Let's delve deeper into each type of owner of Dr. Hönle, beginning with the chart below.

View our latest analysis for Dr. Hönle

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

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.

As you can see, institutional investors have a fair amount of stake in Dr. Hönle. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Dr. Hönle's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Dr. Hönle. Zweiunddreisigste PMB Management GmbH is currently the company's largest shareholder with 20% of shares outstanding. With 6.3% and 3.4% of the shares outstanding respectively, Teslin Capital Management BV and Lazard Frères Gestion SAS are the second and third largest shareholders.

Our studies suggest that the top 21 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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Dr. Hönle

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

Our most recent data indicates that insiders own less than 1% of Dr. Hönle AG. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just €109m, and the board has only €3.3k worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 59% of Dr. Hönle. 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.

Private Company Ownership

We can see that Private Companies own 20%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Dr. Hönle , and understanding them should be part of your investment process.

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.