A kr316m drop in the market cap of Vestum AB (publ) (STO:VESTUM) is not what insiders like to see after purchasing shares recently

Key Insights

• Significant insider control over Vestum implies vested interests in company growth
• The top 7 shareholders own 51% of the company
• Insiders have been buying lately

If you want to know who really controls Vestum AB (publ) (STO:VESTUM), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 39% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

A quick look at our data suggests that insiders have been buying shares in the company recently. Their expectations, however, were not satisfied, as the market cap dropped to kr2.5b over the past week.

Let's delve deeper into each type of owner of Vestum, beginning with the chart below.

See our latest analysis for Vestum

What Does The Institutional Ownership Tell Us About Vestum?

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.

Vestum already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Vestum's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Vestum. From our data, we infer that the largest shareholder is Conny Ryk (who also holds the title of Top Key Executive) with 16% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. In comparison, the second and third largest shareholders hold about 8.0% and 6.2% of the stock. Interestingly, the third-largest shareholder, Per-Arne Ahlgren is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders. Additionally, the company's CEO Simon Gothberg directly holds 3.6% of the total shares outstanding.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Vestum

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.

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 a reasonable proportion of Vestum AB (publ). Insiders have a kr988m stake in this kr2.5b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Vestum. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Vestum (of which 2 can't be ignored!) you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.