Institutional investors may adopt severe steps after Cromwell European Real Estate Investment Trust's (SGX:CWBU) latest 6.3% drop adds to a year losses

Key Insights

• Given the large stake in the stock by institutions, Cromwell European Real Estate Investment Trust's stock price might be vulnerable to their trading decisions
• 50% of the business is held by the top 6 shareholders
• Insiders have been selling lately

Every investor in Cromwell European Real Estate Investment Trust (SGX:CWBU) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And so it follows that institutional investors was the group most impacted after the company's market cap fell to €754m last week after a 6.3% drop in the share price. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 20% might not go down well especially with this category of shareholders. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the decline continues, institutional investors may be pressured to sell Cromwell European Real Estate Investment Trust which might hurt individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Cromwell European Real Estate Investment Trust.

Check out our latest analysis for Cromwell European Real Estate Investment Trust

What Does The Institutional Ownership Tell Us About Cromwell European Real Estate Investment Trust?

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.

Cromwell European Real Estate Investment Trust 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. 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 Cromwell European Real Estate Investment Trust's historic earnings and revenue below, but keep in mind there's always more to the story.

Cromwell European Real Estate Investment Trust is not owned by hedge funds. The company's largest shareholder is Cromwell Property Securities Limited, with ownership of 27%. Andrew Tan is the second largest shareholder owning 7.3% of common stock, and BlackRock, Inc. holds about 5.9% of the company stock.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 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 Cromwell European Real Estate Investment Trust

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.

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 most recent data indicates that insiders own a reasonable proportion of Cromwell European Real Estate Investment Trust. Insiders have a €94m stake in this €754m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 43% stake in Cromwell European Real Estate Investment Trust. 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 Cromwell European Real Estate Investment Trust better, we need to consider many other factors. For example, we've discovered 5 warning signs for Cromwell European Real Estate Investment Trust (2 are potentially serious!) that you should be aware of before investing here.

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.