Institutions along with private equity firms who hold considerable shares inMomentum Group AB (publ) (STO:MMGR B) come under pressure; lose 6.0% of holdings value

Key Insights

• Significant control over Momentum Group by private equity firms implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 56% of the company
• Institutional ownership in Momentum Group is 32%

If you want to know who really controls Momentum Group AB (publ) (STO:MMGR B), then you’ll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private equity firms with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.0% decrease in the stock price last week, private equity firms suffered the most losses, but institutions who own 32% stock also took a hit.

Let’s delve deeper into each type of owner of Momentum Group, beginning with the chart below.

See our latest analysis for Momentum Group

What Does The Institutional Ownership Tell Us About Momentum Group?

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.

As you can see, institutional investors have a fair amount of stake in Momentum Group. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Momentum Group, (below). Of course, keep in mind that there are other factors to consider, too.

It looks like hedge funds own 9.6% of Momentum Group shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company’s largest shareholder is Nordstjernan AB, with ownership of 46%. For context, the second largest shareholder holds about 9.6% of the shares outstanding, followed by an ownership of 8.0% by the third-largest shareholder. Furthermore, CEO Ulf Lilius is the owner of 0.9% of the company’s shares.

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.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Momentum Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can report that insiders do own shares in Momentum Group AB (publ). As individuals, the insiders collectively own kr182m worth of the kr8.3b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public– including retail investors — own 10% stake in the company, and hence can’t easily be ignored. 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 an ownership of 46%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and — as the name suggests — don’t invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

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 risks, for instance. Every company has them, and we’ve spotted 1 warning sign for Momentum Group you should know about.

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.

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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.

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