Painful week for private companies invested in Jerónimo Martins, SGPS, S.A. (ELI:JMT) after 3.2% drop, institutions also suffered losses

Key Insights

• The considerable ownership by private companies in Jerónimo Martins SGPS indicates that they collectively have a greater say in management and business strategy
• Sociedade Francisco Manuel Dos Santos, S.G.P.S., S.E. owns 56% of the company
• Institutions own 25% of Jerónimo Martins SGPS

If you want to know who really controls Jerónimo Martins, SGPS, S.A. (ELI:JMT), then you'll have to look at the makeup of its share registry. With 56% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 25% shares weren’t spared from last week’s €415m market cap drop, private companies as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Jerónimo Martins SGPS.

See our latest analysis for Jerónimo Martins SGPS

What Does The Institutional Ownership Tell Us About Jerónimo Martins SGPS?

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.

Jerónimo Martins SGPS 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 Jerónimo Martins SGPS' earnings history below. Of course, the future is what really matters.

Jerónimo Martins SGPS is not owned by hedge funds. Our data shows that Sociedade Francisco Manuel Dos Santos, S.G.P.S., S.E. is the largest shareholder with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 2.2% and 1.9%, of the shares outstanding, respectively.

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 Jerónimo Martins SGPS

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Jerónimo Martins, SGPS, S.A. insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own €6.0m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 19% 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.

Private Company Ownership

We can see that Private Companies own 56%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jerónimo Martins SGPS better, we need to consider many other factors. For example, we've discovered 1 warning sign for Jerónimo Martins SGPS that you should be aware of before investing here.

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.