Yahoo Finance Nordex SE's (ETR:NDX1) market cap dropped €208m last week; individual investors who hold 47% were hit as were institutions
Key Insights
Significant control over Nordex by public companies implies that the general public has more power to influence management and governance-related decisions
51% of the business is held by the top 2 shareholders
A look at the shareholders of Nordex SE (ETR:NDX1) can tell us which group is most powerful. With 47% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While institutions, who own 25% shares weren’t spared from last week’s €208m market cap drop, public companies as a group suffered the maximum losses
In the chart below, we zoom in on the different ownership groups of Nordex.
View our latest analysis for Nordex
What Does The Institutional Ownership Tell Us About Nordex?
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 Nordex. 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 Nordex's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Nordex. The company's largest shareholder is Acciona, S.A., with ownership of 47%. Meanwhile, the second and third largest shareholders, hold 4.1% and 4.1%, of the shares outstanding, respectively.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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 Nordex
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
We can report that insiders do own shares in Nordex SE. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around €96m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 25% stake in Nordex. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
Public companies currently own 47% of Nordex stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Nordex better, we need to consider many other factors.
Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
