H. Lundbeck A/S (CPH:HLUN B) stock most popular amongst private equity firms who own 69%, while individual investors hold 20%

Key Insights

• Significant control over H. Lundbeck by private equity firms implies that the general public has more power to influence management and governance-related decisions
• Lundbeckfonden BioCapital owns 69% of the company
• Institutional ownership in H. Lundbeck is 11%

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Every investor in H. Lundbeck A/S (CPH:HLUN B) should be aware of the most powerful shareholder groups. With 69% stake, private equity firms possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, individual investors make up 20% of the company’s shareholders.

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

See our latest analysis for H. Lundbeck

What Does The Institutional Ownership Tell Us About H. Lundbeck?

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.

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

H. Lundbeck is not owned by hedge funds. Lundbeckfonden BioCapital is currently the largest shareholder, with 69% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Polar Capital Holdings Plc is the second largest shareholder owning 1.8% of common stock, and Handelsbanken Asset Management holds about 1.3% of the company stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 H. Lundbeck

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own less than 1% of H. Lundbeck A/S. Keep in mind that it's a big company, and the insiders own kr.36m worth of shares. The absolute value might be more important than the proportional share. 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

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over H. Lundbeck. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 69% stake in H. Lundbeck. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand H. Lundbeck better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.