Institutional owners may consider drastic measures as VBG Group AB (publ)'s (STO:VBG B) recent kr480m drop adds to long-term losses

Key Insights

• Significantly high institutional ownership implies VBG Group's stock price is sensitive to their trading actions
• The top 5 shareholders own 50% of the company
• Insiders have been buying lately

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A look at the shareholders of VBG Group AB (publ) (STO:VBG B) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 72% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, institutional investors endured the highest losses last week after market cap fell by kr480m. The recent loss, which adds to a one-year loss of 17% for stockholders, may not sit well with this group of investors. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell VBG Group which might hurt individual investors.

In the chart below, we zoom in on the different ownership groups of VBG Group.

View our latest analysis for VBG Group

What Does The Institutional Ownership Tell Us About VBG Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in VBG Group. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 VBG Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. VBG Group is not owned by hedge funds. Herman Krefting Foundation for Allergy and Asthma Research, Endowment Arm is currently the largest shareholder, with 24% of shares outstanding. With 8.8% and 6.8% of the shares outstanding respectively, Nordea Investment Management, AB and SEB Investment Management AB are the second and third largest shareholders.

On looking further, we found that 50% 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.

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

Insider Ownership Of VBG Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own less than 1% of VBG Group AB (publ). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about kr5.8m worth of stock. This compares to a market capitalization of kr7.8b. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over VBG Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 6.5%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand VBG Group better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for VBG Group you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.