Institutional investors have a lot riding on Ratos AB (publ) (STO:RATO B) with 48% ownership

Key Insights

• Significantly high institutional ownership implies Ratos' stock price is sensitive to their trading actions
• A total of 11 investors have a majority stake in the company with 52% ownership
• Insider ownership in Ratos is 19%

A look at the shareholders of Ratos AB (publ) (STO:RATO B) can tell us which group is most powerful. The group holding the most number of shares in the company, around 48% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 4.4% last week. The one-year return on investment is currently 33% and last week's gain would have been more than welcomed.

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

See our latest analysis for Ratos

What Does The Institutional Ownership Tell Us About Ratos?

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.

As you can see, institutional investors have a fair amount of stake in Ratos. 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 Ratos' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Ratos. Looking at our data, we can see that the largest shareholder is Torsten Soderberg Foundation, Endowment Arm with 8.6% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.4% and 7.0% of the stock. Per-Olof Soderberg, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

After doing some more digging, we found that the top 11 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over 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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Ratos

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 most recent data indicates that insiders own a reasonable proportion of Ratos AB (publ). It is very interesting to see that insiders have a meaningful kr2.6b stake in this kr14b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

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