State or government among Societatea Energetica Electrica S.A.'s (BVB:EL) largest shareholders, saw gain in holdings value after stock jumped 7.4% last week

Key Insights

• Significant control over Societatea Energetica Electrica by state or government implies that the general public has more power to influence management and governance-related decisions
• 55% of the business is held by the top 2 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Societatea Energetica Electrica S.A. (BVB:EL), it is important to understand the ownership structure of the business. With 50% stake, state or government possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, state or government collectively scored the highest last week as the company hit RON4.4b market cap following a 7.4% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Societatea Energetica Electrica.

Check out our latest analysis for Societatea Energetica Electrica

What Does The Institutional Ownership Tell Us About Societatea Energetica Electrica?

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.

Societatea Energetica Electrica already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Societatea Energetica Electrica's historic earnings and revenue below, but keep in mind there's always more to the story.

Societatea Energetica Electrica is not owned by hedge funds. The Ministry of Economy, Commerce and Business Environment of Romania is currently the largest shareholder, with 50% of shares outstanding. With 5.1% and 0.6% of the shares outstanding respectively, European Bank for Reconstruction and Development, Asset Management Arm and BNY Mellon Asset Management are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Societatea Energetica Electrica

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Societatea Energetica Electrica. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

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

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.