Advertisement
Australia markets closed
  • ALL ORDS

    8,015.80
    +72.20 (+0.91%)
     
  • AUD/USD

    0.6619
    +0.0006 (+0.09%)
     
  • ASX 200

    7,778.10
    +77.80 (+1.01%)
     
  • OIL

    80.00
    -0.33 (-0.41%)
     
  • GOLD

    2,327.10
    -1.90 (-0.08%)
     
  • Bitcoin AUD

    99,307.31
    -560.88 (-0.56%)
     
  • CMC Crypto 200

    1,366.77
    -22.63 (-1.63%)
     

Evonik Industries AG (ETR:EVK) is favoured by institutional owners who hold 73% of the company

Key Insights

  • Institutions' substantial holdings in Evonik Industries implies that they have significant influence over the company's share price

  • 10% of the business is held by the top 25 shareholders

  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Evonik Industries AG (ETR:EVK), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 73% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

ADVERTISEMENT

Let's delve deeper into each type of owner of Evonik Industries, beginning with the chart below.

View our latest analysis for Evonik Industries

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Evonik Industries?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Evonik Industries. 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. 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 Evonik Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Evonik Industries. Capital Research and Management Company is currently the company's largest shareholder with 3.0% of shares outstanding. For context, the second largest shareholder holds about 3.0% of the shares outstanding, followed by an ownership of 0.9% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Evonik Industries

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Evonik Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 1 warning sign with Evonik Industries , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.