After losing 45% in the past year, B&M European Value Retail S.A. (LON:BME) institutional owners must be relieved by the recent gain

Key Insights

• Institutions' substantial holdings in B&M European Value Retail implies that they have significant influence over the company's share price
• 51% of the business is held by the top 15 shareholders
• Recent purchases by insiders

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Every investor in B&M European Value Retail S.A. (LON:BME) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week's UK£60m market cap gain would probably be appreciated by institutional investors, especially after a year of 45% losses.

Let's delve deeper into each type of owner of B&M European Value Retail, beginning with the chart below.

View our latest analysis for B&M European Value Retail

What Does The Institutional Ownership Tell Us About B&M European Value Retail?

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 B&M European Value Retail 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 B&M European Value Retail's historic earnings and revenue below, but keep in mind there's always more to the story.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. B&M European Value Retail is not owned by hedge funds. Capital Research and Management Company is currently the company's largest shareholder with 10% of shares outstanding. Sundeep Arora is the second largest shareholder owning 7.0% of common stock, and FMR LLC holds about 5.7% of the company stock.

After doing some more digging, we found that the top 15 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of B&M European Value Retail

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.

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.

We can report that insiders do own shares in B&M European Value Retail S.A.. This is a big company, so it is good to see this level of alignment. Insiders own UK£120m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. For example, we've discovered 3 warning signs for B&M European Value Retail that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.