ENCE Energía y Celulosa, S.A.'s (BME:ENC) last week's 7.4% decline must have disappointed private companies who have a significant stake

Key Insights

• Significant control over ENCE Energía y Celulosa by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 8 investors have a majority stake in the company with 50% ownership
• Institutions own 14% of ENCE Energía y Celulosa

Every investor in ENCE Energía y Celulosa, S.A. (BME:ENC) should be aware of the most powerful shareholder groups. With 44% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies as a group endured the highest losses last week after market cap fell by €54m.

Let's take a closer look to see what the different types of shareholders can tell us about ENCE Energía y Celulosa.

Check out our latest analysis for ENCE Energía y Celulosa

What Does The Institutional Ownership Tell Us About ENCE Energía y Celulosa?

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.

ENCE Energía y Celulosa already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at ENCE Energía y Celulosa's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in ENCE Energía y Celulosa. Retos Operativos XXI, S.L. is currently the largest shareholder, with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.4% and 6.5% of the stock.

We did some more digging and found that 8 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 ENCE Energía y Celulosa

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in ENCE Energía y Celulosa. 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 44%, of the ENCE Energía y Celulosa 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for ENCE Energía y Celulosa (of which 2 shouldn't be ignored!) you should know about.

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.