Stock Analysis

AS LHV Group's (TAL:LHV1T) stock price dropped 4.6% last week; retail investors would not be happy

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Key Insights

  • The considerable ownership by retail investors in AS LHV Group indicates that they collectively have a greater say in management and business strategy
  • 51% of the business is held by the top 10 shareholders
  • Institutions own 17% of AS LHV Group

Every investor in AS LHV Group (TAL:LHV1T) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 4.6% decline in share price, retail investors suffered the most losses.

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

See our latest analysis for AS LHV Group

TLSE:LHV1T Ownership Breakdown March 14th 2023

What Does The Institutional Ownership Tell Us About AS LHV Group?

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 AS LHV Group. 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. 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 AS LHV Group's historic earnings and revenue below, but keep in mind there's always more to the story.

TLSE:LHV1T Earnings and Revenue Growth March 14th 2023

AS LHV Group is not owned by hedge funds. AS LHV Varahaldus is currently the company's largest shareholder with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 8.1% of the stock. Rain Lohmus, who is the third-largest shareholder, also happens to hold the title of Chairman of Supervisory Board.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of AS LHV Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our most recent data indicates that insiders own some shares in AS LHV Group. This is a big company, so it is good to see this level of alignment. Insiders own €106m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 44% stake in AS LHV Group. 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

It seems that Private Companies own 30%, of the AS LHV Group stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for AS LHV Group that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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