Institutional shareholders may be less affected by Modern Times Group MTG AB (publ)'s (STO:MTG B) pullback last week after a year of 3.7% returns

By
Simply Wall St
Published
April 21, 2022
OM:MTG B
Source: Shutterstock

Every investor in Modern Times Group MTG AB (publ) (STO:MTG B) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 42% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 5.1% in value last week. Still, the 3.7% one-year gains may have helped mitigate their overall losses. We would assume however, that they would be on the lookout for weakness in the future.

Let's delve deeper into each type of owner of Modern Times Group MTG, beginning with the chart below.

Check out our latest analysis for Modern Times Group MTG

ownership-breakdown
OM:MTG B Ownership Breakdown April 21st 2022

What Does The Institutional Ownership Tell Us About Modern Times Group MTG?

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.

Modern Times Group MTG 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 Modern Times Group MTG, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
OM:MTG B Earnings and Revenue Growth April 21st 2022

It looks like hedge funds own 5.2% of Modern Times Group MTG shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Active Ownership Capital S.à R.L. is currently the largest shareholder, with 11% of shares outstanding. With 5.2% and 5.2% of the shares outstanding respectively, Kabouter Management, LLC and Swedbank Robur Fonder AB are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Modern Times Group MTG

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data suggests that insiders own under 1% of Modern Times Group MTG AB (publ) in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own kr6.7m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Modern Times Group MTG. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With an ownership of 11%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Modern Times Group MTG better, we need to consider many other factors. Be aware that Modern Times Group MTG is showing 2 warning signs in our investment analysis , 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.

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