Solaria Energía y Medio Ambiente, S.A.'s (BME:SLR) last week's 9.0% decline must have disappointed individual investors who have a significant stake

Key Insights

• The considerable ownership by individual investors in Solaria Energía y Medio Ambiente indicates that they collectively have a greater say in management and business strategy
• The top 7 shareholders own 52% of the company
• Institutional ownership in Solaria Energía y Medio Ambiente is 23%

If you want to know who really controls Solaria Energía y Medio Ambiente, S.A. (BME:SLR), then you'll have to look at the makeup of its share registry. With 39% stake, individual investors 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).

As market cap fell to €1.0b last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

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

View our latest analysis for Solaria Energía y Medio Ambiente

What Does The Institutional Ownership Tell Us About Solaria Energía y Medio Ambiente?

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.

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

We note that hedge funds don't have a meaningful investment in Solaria Energía y Medio Ambiente. Looking at our data, we can see that the largest shareholder is DTL Corporación, S.L. with 35% of shares outstanding. Grantham Mayo Van Otterloo & Co. LLC is the second largest shareholder owning 3.2% of common stock, and Amundi S.A. holds about 3.1% of the company stock. Furthermore, CEO Jose Diaz-Tejeiro Larranaga is the owner of 1.2% of the company's shares.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Solaria Energía y Medio Ambiente

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.

We can report that insiders do own shares in Solaria Energía y Medio Ambiente, S.A.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around €22m 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 39% stake in Solaria Energía y Medio Ambiente. 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 36%, 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:

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. Case in point: We've spotted 2 warning signs for Solaria Energía y Medio Ambiente you should be aware of, and 1 of them is potentially serious.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.