Private companies invested in Elmos Semiconductor SE (ETR:ELG) copped the brunt of last week's €45m market cap decline

Key Insights

• The considerable ownership by private companies in Elmos Semiconductor indicates that they collectively have a greater say in management and business strategy
• 57% of the business is held by the top 3 shareholders
• Insider ownership in Elmos Semiconductor is 26%

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A look at the shareholders of Elmos Semiconductor SE (ETR:ELG) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 33% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 26% came under pressure after market cap dropped to €1.4b last week,private companies took the most losses.

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

Check out our latest analysis for Elmos Semiconductor

What Does The Institutional Ownership Tell Us About Elmos Semiconductor?

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

We note that hedge funds don't have a meaningful investment in Elmos Semiconductor. The company's largest shareholder is Klaus Weyer, with ownership of 24%. For context, the second largest shareholder holds about 18% of the shares outstanding, followed by an ownership of 15% by the third-largest shareholder.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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

Insider Ownership Of Elmos Semiconductor

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Elmos Semiconductor SE. It has a market capitalization of just €1.4b, and insiders have €360m worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Elmos Semiconductor. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 33%, of the shares on issue. 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.

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.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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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.