Senior Key Executive Andrea Cangioli, EL.En. S.p.A.'s (BIT:ELN) largest shareholder sees value of holdings go down 16% after recent drop

Key Insights

• EL.En's significant insider ownership suggests inherent interests in company's expansion
• The top 5 shareholders own 56% of the company
• 29% of EL.En is held by Institutions

To get a sense of who is truly in control of EL.En. S.p.A. (BIT:ELN), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to €895m last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of EL.En.

View our latest analysis for EL.En

What Does The Institutional Ownership Tell Us About EL.En?

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.

EL.En already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of EL.En, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in EL.En. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In EL.En's case, its Senior Key Executive, Andrea Cangioli, is the largest shareholder, holding 15% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 11% by the third-largest shareholder. Interestingly, the third-largest shareholder, Alberto Pecci is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders. Additionally, the company's CEO Gabriele Clementi directly holds 9.9% of the total shares outstanding.

On looking further, we found that 56% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of EL.En

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our information suggests that insiders maintain a significant holding in EL.En. S.p.A.. Insiders own €319m worth of shares in the €895m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in EL.En. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 7.5%, of the shares on issue. 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. For instance, we've identified 1 warning sign for EL.En that you should be aware of.

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.