Painful week for individual investors invested in Hexagon Composites ASA (OB:HEX) after 5.8% drop, institutions also suffered losses

Key Insights

• Significant control over Hexagon Composites by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 10 shareholders
• Insiders have been selling lately

To get a sense of who is truly in control of Hexagon Composites ASA (OB:HEX), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 37% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 5.8% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 25% stock also took a hit.

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

Check out our latest analysis for Hexagon Composites

What Does The Institutional Ownership Tell Us About Hexagon Composites?

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.

Hexagon Composites already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Hexagon Composites' earnings history below. Of course, the future is what really matters.

Hexagon Composites is not owned by hedge funds. The company's largest shareholder is Mitsui & Co., Ltd., with ownership of 22%. In comparison, the second and third largest shareholders hold about 7.6% and 5.8% of the stock.

We did some more digging and found that 10 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Hexagon Composites

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Hexagon Composites ASA. In their own names, insiders own kr679m worth of stock in the kr8.6b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Hexagon Composites. 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.

Private Company Ownership

Our data indicates that Private Companies hold 8.7%, of the company's shares. 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.

Public Company Ownership

Public companies currently own 22% of Hexagon Composites stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hexagon Composites better, we need to consider many other factors. Take risks for example - Hexagon Composites has 2 warning signs we think you should be aware of.

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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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.