Private equity firms are ALK-Abelló A/S' (CPH:ALK B) biggest owners and were rewarded after market cap rose by kr.1.9b last week

Key Insights

• Significant control over ALK-Abelló by private equity firms implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 51% of the company
• Institutions own 24% of ALK-Abelló

Every investor in ALK-Abelló A/S (CPH:ALK B) should be aware of the most powerful shareholder groups. We can see that private equity firms own the lion's share in the company with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private equity firms were the biggest beneficiaries of last week’s 5.3% gain.

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

View our latest analysis for ALK-Abelló

What Does The Institutional Ownership Tell Us About ALK-Abelló?

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.

ALK-Abelló already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 ALK-Abelló, (below). Of course, keep in mind that there are other factors to consider, too.

ALK-Abelló is not owned by hedge funds. Lundbeckfonden BioCapital is currently the company's largest shareholder with 41% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.1% and 2.3%, of the shares outstanding, respectively.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 ALK-Abelló

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of ALK-Abelló A/S in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own kr.13m worth of shares. 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-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. 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 Equity Ownership

With a stake of 41%, private equity firms could influence the ALK-Abelló board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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.