Key Insights
- AB Electrolux’s significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- 52% of the business is held by the top 10 shareholders
- Institutions own 37% of AB Electrolux
To get a sense of who is truly in control of AB Electrolux (publ) (STO:ELUX B), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 45% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Following a 6.3% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 37% stock also took a hit.
Let’s take a closer look to see what the different types of shareholders can tell us about AB Electrolux.
Check out our latest analysis for AB Electrolux
What Does The Institutional Ownership Tell Us About AB Electrolux?
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.
We can see that AB Electrolux 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. 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 AB Electrolux’s historic earnings and revenue below, but keep in mind there’s always more to the story.
We note that hedge funds don’t have a meaningful investment in AB Electrolux. The company’s largest shareholder is Investor AB (publ), with ownership of 17%. Meanwhile, the second and third largest shareholders, hold 6.6% and 5.4%, of the shares outstanding, respectively.
On further inspection, we found that more than half the company’s shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of AB Electrolux
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.
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.
Our most recent data indicates that insiders own less than 1% of AB Electrolux (publ). It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own kr51m 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 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over AB Electrolux. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
With a stake of 17%, private equity firms could influence the AB Electrolux board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Next Steps:
It’s always worth thinking about the different groups who own shares in a company. But to understand AB Electrolux better, we need to consider many other factors. Take risks for example – AB Electrolux has 1 warning sign we think you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
Valuation is complex, but we’re helping make it simple.
Find out whether AB Electrolux is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
