Exail Technologies' (EPA:EXA) last week's 17% decline must have disappointed private equity firms who have a significant stake

Key Insights

• Exail Technologies' significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 3 shareholders own 50% of the company
• Institutions own 22% of Exail Technologies

Every investor in Exail Technologies (EPA:EXA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 44% to be precise, is private equity firms. 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 17% decline in share price, private equity firms suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Exail Technologies.

View our latest analysis for Exail Technologies

What Does The Institutional Ownership Tell Us About Exail Technologies?

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

We note that hedge funds don't have a meaningful investment in Exail Technologies. Our data shows that Pelican Venture SAS is the largest shareholder with 44% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.7% and 2.8%, of the shares outstanding, respectively. Furthermore, CEO Raphael Gorge is the owner of 0.5% of the company's shares.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

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 Exail Technologies

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.

We can report that insiders do own shares in Exail Technologies. In their own names, insiders own €3.9m worth of stock in the €328m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Exail Technologies. 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 Equity Ownership

Private equity firms hold a 44% stake in Exail Technologies. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

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 Exail Technologies , 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.