Institutions along with public companies who hold considerable shares inKION GROUP AG (ETR:KGX) come under pressure; lose 8.5% of holdings value

Key Insights

• KION GROUP's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 2 shareholders own 51% of the company
• Institutional ownership in KION GROUP is 33%

Every investor in KION GROUP AG (ETR:KGX) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 47% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 33% shares weren’t spared from last week’s €380m market cap drop, public companies as a group suffered the maximum losses

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

See our latest analysis for KION GROUP

What Does The Institutional Ownership Tell Us About KION GROUP?

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.

KION GROUP already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see KION GROUP's historic earnings and revenue below, but keep in mind there's always more to the story.

KION GROUP is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Weichai Power Co., Ltd. with 47% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.3% and 3.0% of the stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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

Insider Ownership Of KION GROUP

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own less than 1% of KION GROUP AG. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around €3.9m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in KION GROUP. 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

We can see that public companies hold 47% of the KION GROUP shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for KION GROUP that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.