Safilo Group S.p.A.'s (BIT:SFL) largest shareholders are private equity firms who were rewarded as market cap surged €37m last week
Key Insights
- Safilo Group's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
- The top 2 shareholders own 65% of the company
- Institutional ownership in Safilo Group is 12%
Every investor in Safilo Group S.p.A. (BIT:SFL) should be aware of the most powerful shareholder groups. With 50% stake, private equity firms possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, private equity firms collectively scored the highest last week as the company hit €389m market cap following a 10% gain in the stock.
Let's take a closer look to see what the different types of shareholders can tell us about Safilo Group.
Check out our latest analysis for Safilo Group
What Does The Institutional Ownership Tell Us About Safilo 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.
As you can see, institutional investors have a fair amount of stake in Safilo Group. 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 Safilo Group's historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 15% of Safilo Group shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. HAL Holding N.V. is currently the largest shareholder, with 50% of shares outstanding. BDL Capital Management SAS is the second largest shareholder owning 15% of common stock, and Norges Bank Investment Management holds about 2.6% of the company stock.
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.
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 Safilo Group
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 note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.
General Public Ownership
The general public, who are usually individual investors, hold a 23% stake in Safilo Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
With a stake of 50%, private equity firms could influence the Safilo Group board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Safilo Group better, we need to consider many other factors. Be aware that Safilo Group is showing 2 warning signs in our investment analysis , you should know about...
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.
About BIT:SFL
Safilo Group
Engages in the design, production, and wholesale distribution of optical frames, sunglasses, sports eyewear, goggles, and helmets in North America, Europe, the Asia Pacific, and internationally.
Flawless balance sheet and fair value.