Elektro Ljubljana d.d.'s (LJSE:ELOG) market cap dropped €29m last week; State or government bore the brunt

Key Insights

• Significant control over Elektro Ljubljana d.d by state or government implies that the general public has more power to influence management and governance-related decisions
• Slovenia owns 80% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Elektro Ljubljana d.d. (LJSE:ELOG), 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 80% to be precise, is state or government. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to €114m last week, state or government would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Elektro Ljubljana d.d.

Check out our latest analysis for Elektro Ljubljana d.d

What Does The Institutional Ownership Tell Us About Elektro Ljubljana d.d?

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.

We can see that Elektro Ljubljana d.d does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Elektro Ljubljana d.d's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Elektro Ljubljana d.d. The company's largest shareholder is Slovenia, with ownership of 80%. This implies that they have majority interest control of the future of the company. Generali Asset Management SGR SpA is the second largest shareholder owning 3.9% of common stock, and Triglav Skladi, d.o.o. holds about 2.7% of the company stock.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Elektro Ljubljana d.d

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.

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.

We can report that insiders do own shares in Elektro Ljubljana d.d.. It has a market capitalization of just €114m, and insiders have €1.9m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Elektro Ljubljana d.d. 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.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Elektro Ljubljana d.d , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.