Recent uptick might appease Adyen N.V. (AMS:ADYEN) institutional owners after losing 22% over the past year

Key Insights

• Significantly high institutional ownership implies Adyen's stock price is sensitive to their trading actions
• The top 25 shareholders own 42% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Adyen N.V. (AMS:ADYEN), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors would appreciate the 4.0% increase in share price last week, given their one-year losses have totalled a disappointing 22%.

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

View our latest analysis for Adyen

What Does The Institutional Ownership Tell Us About Adyen?

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.

We can see that Adyen 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. 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 Adyen, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Adyen. Our data shows that Baillie Gifford & Co. is the largest shareholder with 5.7% of shares outstanding. For context, the second largest shareholder holds about 4.4% of the shares outstanding, followed by an ownership of 3.7% by the third-largest shareholder. Additionally, the company's CEO Pieter van der Does directly holds 3.0% of the total shares outstanding.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Adyen

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.

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.

We can report that insiders do own shares in Adyen N.V.. It is a very large company, and board members collectively own €1.8b worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 47% stake in Adyen. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Adyen , and understanding them should be part of your investment process.

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.