Nordea Bank Abp (STO:NDA SE) is favoured by institutional owners who hold 46% of the company

By
Simply Wall St
Published
May 13, 2022
OM:NDA SE
Source: Shutterstock

To get a sense of who is truly in control of Nordea Bank Abp (STO:NDA SE), it is important to understand the ownership structure of the business. With 46% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

In the chart below, we zoom in on the different ownership groups of Nordea Bank Abp.

View our latest analysis for Nordea Bank Abp

ownership-breakdown
OM:NDA SE Ownership Breakdown May 13th 2022

What Does The Institutional Ownership Tell Us About Nordea Bank Abp?

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.

Nordea Bank Abp 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Nordea Bank Abp, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
OM:NDA SE Earnings and Revenue Growth May 13th 2022

Our data indicates that hedge funds own 5.1% of Nordea Bank Abp. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Sampo Oyj is currently the company's largest shareholder with 6.5% of shares outstanding. The second and third largest shareholders are BlackRock, Inc. and Cevian Capital AB, with an equal amount of shares to their name at 5.1%.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Nordea Bank Abp

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data suggests that insiders own under 1% of Nordea Bank Abp in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own kr43m of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Nordea Bank Abp. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 6.5% of Nordea Bank Abp. 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 Nordea Bank Abp better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Nordea Bank Abp you should know about.

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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