Could The McPhy Energy S.A. (EPA:MCPHY) Ownership Structure Tell Us Something Useful?

A look at the shareholders of McPhy Energy S.A. (EPA:MCPHY) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.

McPhy Energy is not a large company by global standards. It has a market capitalization of €93m, which means it wouldn’t have the attention of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about McPhy Energy.

View our latest analysis for McPhy Energy

ENXTPA:MCPHY Ownership Summary, February 11th 2020
ENXTPA:MCPHY Ownership Summary, February 11th 2020

What Does The Institutional Ownership Tell Us About McPhy Energy?

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 own 18% of McPhy Energy. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. 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 McPhy Energy’s earnings history, below. Of course, the future is what really matters.

ENXTPA:MCPHY Income Statement, February 11th 2020
ENXTPA:MCPHY Income Statement, February 11th 2020

McPhy Energy is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is EDF Pulse Croissance with 18% of shares outstanding. With 7.7% and 3.2% of the shares outstanding respectively, Bpifrance Participations SA and Sofinnova Partners are the second and third largest shareholders.

On studying our ownership data, we found that 22 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of McPhy Energy

The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 data suggests that insiders own under 1% of McPhy Energy S.A. in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about €176k worth of stock. This compares to a market capitalization of €93m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, mostly retail investors, hold a substantial 53% stake in MCPHY, suggesting it is a fairly popular stock. This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Equity Ownership

With a stake of 26%, private equity firms could influence the MCPHY board. 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:

It’s always worth thinking about the different groups who own shares in a company. But to understand McPhy Energy better, we need to consider many other factors. To that end, you should be aware of the 4 warning signs we’ve spotted with McPhy Energy .

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.