Elior Group SA's (EPA:ELIOR) stock price dropped 33% last week; public companies would not be happy

Key Insights

• Elior Group's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 2 shareholders own 53% of the company
• Institutional ownership in Elior Group is 22%

Every investor in Elior Group SA (EPA:ELIOR) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 48% ownership. 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 33% decline in share price, public companies suffered the most losses.

Let's delve deeper into each type of owner of Elior Group, beginning with the chart below.

View our latest analysis for Elior Group

What Does The Institutional Ownership Tell Us About Elior Group?

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.

We can see that Elior Group 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. 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 Elior Group's earnings history below. Of course, the future is what really matters.

Elior Group is not owned by hedge funds. Derichebourg SA is currently the largest shareholder, with 48% of shares outstanding. With 5.0% and 3.6% of the shares outstanding respectively, BDL Capital Management SAS and Fonds Stratégique de Participation (FSP) Compartiment are the second and third largest shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Elior Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that Elior Group SA 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. It seems the board members have no more than €1.2m worth of shares in the €697m company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Elior Group. 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

Our data indicates that Private Companies hold 4.9%, of the company's shares. 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.

Public Company Ownership

We can see that public companies hold 48% of the Elior Group shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Elior Group better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Elior Group you should be aware of.

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.

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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.