Institutions along with retail investors who hold considerable shares inAvantium N.V. (AMS:AVTX) come under pressure; lose 22% of holdings value

Key Insights

• Avantium's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 47% of the business is held by the top 21 shareholders
• Institutional ownership in Avantium is 41%

A look at the shareholders of Avantium N.V. (AMS:AVTX) can tell us which group is most powerful. With 53% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 41% came under pressure after market cap dropped to €121m last week,retail investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Avantium.

Check out our latest analysis for Avantium

What Does The Institutional Ownership Tell Us About Avantium?

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 Avantium. 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 Avantium, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Avantium. Stichting Pensioenfonds ABP is currently the largest shareholder, with 9.2% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.8% and 5.2% of the stock.

On studying our ownership data, we found that 21 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Avantium

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data suggests that insiders own under 1% of Avantium N.V. in their own names. It has a market capitalization of just €121m, and the board has only €414k worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 53% stake in Avantium, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Equity Ownership

With a stake of 5.2%, private equity firms could influence the Avantium 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:

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 3 warning signs with Avantium (at least 2 which are significant) , 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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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.