Institutional owners may consider drastic measures as Bilia AB (publ)'s (STO:BILI A) recent kr666m drop adds to long-term losses

Key Insights

• Given the large stake in the stock by institutions, Bilia's stock price might be vulnerable to their trading decisions
• A total of 9 investors have a majority stake in the company with 52% ownership
• Recent purchases by insiders

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Every investor in Bilia AB (publ) (STO:BILI A) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, institutional investors endured the highest losses last week after market cap fell by kr666m. The recent loss, which adds to a one-year loss of 9.2% 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 downtrend continues, institutions may face pressures to sell Bilia, which might have negative implications on individual investors.

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

See our latest analysis for Bilia

What Does The Institutional Ownership Tell Us About Bilia?

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 Bilia. 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. 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 Bilia's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Bilia. Looking at our data, we can see that the largest shareholder is Mats Qviberg with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 5.6% of the stock. Anna Engebretsen, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

We did some more digging and found that 9 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Bilia

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems insiders own a significant proportion of Bilia AB (publ). It has a market capitalization of just kr11b, and insiders have kr3.6b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Bilia. 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:

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. To that end, you should be aware of the 2 warning signs we've spotted with Bilia .

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.