LVMH Moët Hennessy - Louis Vuitton, Société Européenne's (EPA:MC) last week's 3.1% decline must have disappointed private companies who have a significant stake

Key Insights

• The considerable ownership by private companies in LVMH Moët Hennessy - Louis Vuitton Société Européenne indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 50% ownership
• Institutional ownership in LVMH Moët Hennessy - Louis Vuitton Société Européenne is 18%

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To get a sense of who is truly in control of LVMH Moët Hennessy - Louis Vuitton, Société Européenne (EPA:MC), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to €236b last week, private companies 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 LVMH Moët Hennessy - Louis Vuitton Société Européenne.

See our latest analysis for LVMH Moët Hennessy - Louis Vuitton Société Européenne

What Does The Institutional Ownership Tell Us About LVMH Moët Hennessy - Louis Vuitton Société Européenne?

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.

We can see that LVMH Moët Hennessy - Louis Vuitton Société Européenne does have institutional investors; and they hold a good portion of the company's stock. 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 LVMH Moët Hennessy - Louis Vuitton Société Européenne's 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 LVMH Moët Hennessy - Louis Vuitton Société Européenne. Financière Agache Société Anonyme is currently the company's largest shareholder with 48% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 2.5% and 2.1%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of LVMH Moët Hennessy - Louis Vuitton Société Européenne

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 information suggests that LVMH Moët Hennessy - Louis Vuitton, Société Européenne insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own €1.1b of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in LVMH Moët Hennessy - Louis Vuitton Société Européenne. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 49%, of the LVMH Moët Hennessy - Louis Vuitton Société Européenne 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:

It's always worth thinking about the different groups who own shares in a company. But to understand LVMH Moët Hennessy - Louis Vuitton Société Européenne better, we need to consider many other factors. Be aware that LVMH Moët Hennessy - Louis Vuitton Société Européenne is showing 1 warning sign in our investment analysis , 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.