Both private companies who control a good portion of Waga Energy SA (EPA:WAGA) along with institutions must be dismayed after last week's 12% decrease

Key Insights

• The considerable ownership by private companies in Waga Energy indicates that they collectively have a greater say in management and business strategy
• A total of 7 investors have a majority stake in the company with 53% ownership
• Insiders own 14% of Waga Energy

A look at the shareholders of Waga Energy SA (EPA:WAGA) can tell us which group is most powerful. The group holding the most number of shares in the company, around 25% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of private companies took a hit after last week’s 12% price drop, institutions with their 24% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Waga Energy.

See our latest analysis for Waga Energy

What Does The Institutional Ownership Tell Us About Waga Energy?

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.

Waga Energy already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Waga Energy's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Waga Energy. Looking at our data, we can see that the largest shareholder is Air Liquide Investissements d'Avenir et de Demonstration S.A. with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 8.7%, of the shares outstanding, respectively. In addition, we found that Mathieu Lefebvre, the CEO has 7.0% of the shares allocated to their name.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Waga Energy

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of Waga Energy SA. Insiders have a €46m stake in this €317m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. 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 20% stake in Waga Energy. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 25%, of the Waga Energy stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 4 warning signs we've spotted with Waga Energy (including 2 which make us uncomfortable) .

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.