Could The TAG Immobilien AG (ETR:TEG) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
March 07, 2022
XTRA:TEG
Source: Shutterstock

The big shareholder groups in TAG Immobilien AG (ETR:TEG) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of €3.2b, TAG Immobilien is rather large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about TAG Immobilien.

View our latest analysis for TAG Immobilien

ownership-breakdown
XTRA:TEG Ownership Breakdown March 7th 2022

What Does The Institutional Ownership Tell Us About TAG Immobilien?

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 TAG Immobilien 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. 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 TAG Immobilien's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
XTRA:TEG Earnings and Revenue Growth March 7th 2022

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. TAG Immobilien is not owned by hedge funds. Our data shows that Massachusetts Financial Services Company is the largest shareholder with 9.9% of shares outstanding. For context, the second largest shareholder holds about 8.1% of the shares outstanding, followed by an ownership of 5.4% by the third-largest shareholder.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of TAG Immobilien

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.

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.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in TAG Immobilien. 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.

Private Company Ownership

Our data indicates that Private Companies hold 4.7%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 instance, we've identified 3 warning signs for TAG Immobilien (2 are potentially serious) that you should be aware of.

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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