Yahoo Finance Retail investors account for 56% of FRoSTA Aktiengesellschaft's (FRA:NLM) ownership, while insiders account for 44%
Key Insights
FRoSTA's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 5 shareholders own 44% of the company
Every investor in FRoSTA Aktiengesellschaft (FRA:NLM) should be aware of the most powerful shareholder groups. With 56% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And individual insiders on the other hand have a 44% ownership in the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
In the chart below, we zoom in on the different ownership groups of FRoSTA.
Check out our latest analysis for FRoSTA
What Does The Lack Of Institutional Ownership Tell Us About FRoSTA?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.
There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. FRoSTA might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Hedge funds don't have many shares in FRoSTA. With a 34% stake, CEO Felix Ahlers is the largest shareholder. With 10.0% and 0.2% of the shares outstanding respectively, Dirk Ahlers and PEH Wertpapier AG are the second and third largest shareholders.
On studying our ownership data, we found that 5 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of FRoSTA
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.
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.
It seems insiders own a significant proportion of FRoSTA Aktiengesellschaft. It has a market capitalization of just €463m, and insiders have €202m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 56% stake in FRoSTA, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
