Private companies are LNA Santé SA's (EPA:LNA) biggest owners and were hit after market cap dropped €45m

By
Simply Wall St
Published
January 25, 2022
ENXTPA:LNA
Source: Shutterstock

To get a sense of who is truly in control of LNA Santé SA (EPA:LNA), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 36% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 9.7% decline in share price, private companies suffered the most losses.

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

See our latest analysis for LNA Santé

ownership-breakdown
ENXTPA:LNA Ownership Breakdown January 25th 2022

What Does The Institutional Ownership Tell Us About LNA Santé?

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.

We can see that LNA Santé does have institutional investors; and they hold a good portion of the company's stock. 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 LNA Santé's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
ENXTPA:LNA Earnings and Revenue Growth January 25th 2022

We note that hedge funds don't have a meaningful investment in LNA Santé. Societe Civile Financiere Vertavienne is currently the company's largest shareholder with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 5.6% of the stock. Additionally, the company's CEO Jean Siret directly holds 0.7% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 6 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 LNA Santé

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in LNA Santé SA. In their own names, insiders own €28m worth of stock in the €416m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LNA Santé. 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 36%, of the LNA Santé 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with LNA Santé , and understanding them should be part of your investment process.

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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