Could The Sporting Clube de Portugal - Futebol, SAD (ELI:SCP) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
February 11, 2021
ENXTLS:SCP
Source: Shutterstock

If you want to know who really controls Sporting Clube de Portugal - Futebol, SAD (ELI:SCP), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of €84m, Sporting Clube de Portugal - Futebol SAD is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Sporting Clube de Portugal - Futebol SAD.

See our latest analysis for Sporting Clube de Portugal - Futebol SAD

ownership-breakdown
ENXTLS:SCP Ownership Breakdown February 11th 2021

What Does The Institutional Ownership Tell Us About Sporting Clube de Portugal - Futebol SAD?

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.

As you can see, institutional investors have a fair amount of stake in Sporting Clube de Portugal - Futebol SAD. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Sporting Clube de Portugal - Futebol SAD's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
ENXTLS:SCP Earnings and Revenue Growth February 11th 2021

Hedge funds don't have many shares in Sporting Clube de Portugal - Futebol SAD. Our data shows that Sociedade Gestora de Participações Sociais S.A. is the largest shareholder with 37% of shares outstanding. For context, the second largest shareholder holds about 30% of the shares outstanding, followed by an ownership of 3.2% by the third-largest shareholder.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Sporting Clube de Portugal - Futebol SAD

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own less than 1% of Sporting Clube de Portugal - Futebol, SAD. However, it's possible that insiders might have an indirect interest through a more complex structure. It seems the board members have no more than €1.6k worth of shares in the €84m company. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 30% ownership, the general public have some degree of sway over Sporting Clube de Portugal - Futebol SAD. 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 40%, of the shares on issue. 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.

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 3 warning signs with Sporting Clube de Portugal - Futebol SAD (at least 2 which are a bit unpleasant) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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. 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.
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