Is REN - Redes Energéticas Nacionais, SGPS, S.A. (ELI:RENE) Popular Amongst Institutions?

Published
July 22, 2022
ENXTLS:RENE
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Every investor in REN - Redes Energéticas Nacionais, SGPS, S.A. (ELI:RENE) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that used to be publicly owned tend to have lower insider ownership.

REN - Redes Energéticas Nacionais SGPS has a market capitalization of €1.8b, so we would expect some institutional investors to have noticed the stock. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about REN - Redes Energéticas Nacionais SGPS.

See our latest analysis for REN - Redes Energéticas Nacionais SGPS

ownership-breakdown
ENXTLS:RENE Ownership Breakdown July 22nd 2022

What Does The Institutional Ownership Tell Us About REN - Redes Energéticas Nacionais 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.

We can see that REN - Redes Energéticas Nacionais SGPS 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 REN - Redes Energéticas Nacionais SGPS' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
ENXTLS:RENE Earnings and Revenue Growth July 22nd 2022

We note that hedge funds don't have a meaningful investment in REN - Redes Energéticas Nacionais SGPS. Looking at our data, we can see that the largest shareholder is State Grid Corporation of China with 25% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 6.2% by the third-largest shareholder.

On looking further, we found that 54% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of REN - Redes Energéticas Nacionais SGPS

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of REN - Redes Energéticas Nacionais, SGPS, S.A.. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own €95k 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, who are usually individual investors, hold a 30% stake in REN - Redes Energéticas Nacionais SGPS. 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 25%, of the company's shares. 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.

Public Company Ownership

We can see that public companies hold 5.0% of the REN - Redes Energéticas Nacionais SGPS shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand REN - Redes Energéticas Nacionais SGPS better, we need to consider many other factors. Take risks for example - REN - Redes Energéticas Nacionais SGPS 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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