Institutions along with retail investors who hold considerable shares inK+S Aktiengesellschaft (ETR:SDF) come under pressure; lose 5.2% of holdings value

Key Insights

• K+S' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 38% of the company
• Institutional ownership in K+S is 39%

Every investor in K+S Aktiengesellschaft (ETR:SDF) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 39% came under pressure after market cap dropped to €2.3b last week,retail investors took the most losses.

Let's delve deeper into each type of owner of K+S, beginning with the chart below.

View our latest analysis for K+S

What Does The Institutional Ownership Tell Us About K+S?

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.

We can see that K+S does have institutional investors; and they hold a good portion of the company's stock. 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. 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 K+S' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in K+S. The Vanguard Group, Inc. is currently the largest shareholder, with 3.9% of shares outstanding. For context, the second largest shareholder holds about 3.3% of the shares outstanding, followed by an ownership of 3.2% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 K+S

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.

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 data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 57% stake in K+S, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand K+S better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for K+S you should be aware of, and 1 of them is a bit unpleasant.

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.