SGL Carbon SE's (ETR:SGL) market cap dropped €50m last week; individual investors who hold 38% were hit as were institutions

Key Insights

• Significant control over SGL Carbon by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 3 investors have a majority stake in the company with 54% ownership
• 36% of SGL Carbon is held by Institutions

Every investor in SGL Carbon SE (ETR:SGL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 38% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 36% came under pressure after market cap dropped to €963m last week,individual investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about SGL Carbon.

Check out our latest analysis for SGL Carbon

What Does The Institutional Ownership Tell Us About SGL Carbon?

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.

As you can see, institutional investors have a fair amount of stake in SGL Carbon. 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. 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 SGL Carbon, (below). Of course, keep in mind that there are other factors to consider, too.

SGL Carbon is not owned by hedge funds. SKion GmbH is currently the company's largest shareholder with 29% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 18% and 7.4%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 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 SGL Carbon

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 data suggests that insiders own under 1% of SGL Carbon SE in their own names. Keep in mind that it's a big company, and the insiders own €2.0m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SGL Carbon. 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 26% of the SGL Carbon 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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.