Stock Analysis

Koninklijke Ahold Delhaize N.V.'s (AMS:AD) latest 3.7% decline adds to one-year losses, institutional investors may consider drastic measures

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Key Insights

  • Significantly high institutional ownership implies Koninklijke Ahold Delhaize's stock prices are sensitive to their trading actions.
  • The top 25 shareholders own 40% of the company
  • Insiders have been selling lately

Every investor in Koninklijke Ahold Delhaize N.V. (AMS:AD) should be aware of the most powerful shareholder groups. With 55% stake, institutions 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.

And institutional investors endured the highest losses after the company's share price fell by 3.7% last week. The recent loss, which adds to a one-year loss of 3.2% for stockholders, may not sit well with this group of investors. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the downtrend continues, institutions may face pressures to sell Koninklijke Ahold Delhaize, which might have negative implications on individual investors.

In the chart below, we zoom in on the different ownership groups of Koninklijke Ahold Delhaize.

Check out our latest analysis for Koninklijke Ahold Delhaize

ENXTAM:AD Ownership Breakdown January 29th 2023

What Does The Institutional Ownership Tell Us About Koninklijke Ahold Delhaize?

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 Koninklijke Ahold Delhaize 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Koninklijke Ahold Delhaize's earnings history below. Of course, the future is what really matters.

ENXTAM:AD Earnings and Revenue Growth January 29th 2023

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Koninklijke Ahold Delhaize is not owned by hedge funds. BlackRock, Inc. is currently the company's largest shareholder with 6.0% of shares outstanding. With 3.8% and 3.4% of the shares outstanding respectively, The Vanguard Group, Inc. and Amundi Asset Management are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Koninklijke Ahold Delhaize

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. 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.

Our most recent data indicates that insiders own less than 1% of Koninklijke Ahold Delhaize N.V.. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own €18m worth of shares (at current prices). In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Koninklijke Ahold Delhaize better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Koninklijke Ahold Delhaize .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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