Ørsted A/S (CPH:ORSTED) surges 3.5%; state or government who own 50% shares profited along with institutions

Key Insights

• The considerable ownership by state or government in Ørsted indicates that they collectively have a greater say in management and business strategy
• Denmark owns 50% of the company
• 23% of Ørsted is held by Institutions

A look at the shareholders of Ørsted A/S (CPH:ORSTED) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are state or government with 50% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While state or government were the group that benefitted the most from last week’s kr.6.3b market cap gain, institutions too had a 23% share in those profits.

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

Check out our latest analysis for Ørsted

What Does The Institutional Ownership Tell Us About Ørsted?

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.

As you can see, institutional investors have a fair amount of stake in Ørsted. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Ørsted, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Ørsted. Our data shows that Denmark is the largest shareholder with 50% of shares outstanding. This implies that they have majority interest control of the future of the company. Andel A.m.b.a. is the second largest shareholder owning 5.0% of common stock, and Norges Bank Investment Management holds about 2.9% 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Ørsted

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 suggests that insiders own under 1% of Ørsted A/S in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own kr.25m of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 22% 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 Company Ownership

Our data indicates that Private Companies hold 5.0%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Ørsted , and understanding them should be part of your investment process.

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.