Institutions profited after Enel Chile S.A.'s (SNSE:ENELCHILE) market cap rose CL$187b last week but public companies profited the most

Simply Wall St · 01/29/2024 11:16

Key Insights

  • The considerable ownership by public companies in Enel Chile indicates that they collectively have a greater say in management and business strategy
  • The largest shareholder of the company is Enel SpA with a 64% stake
  • Institutional ownership in Enel Chile is 18%

If you want to know who really controls Enel Chile S.A. (SNSE:ENELCHILE), then you'll have to look at the makeup of its share registry. We can see that public companies own the lion's share in the company with 64% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 5.1% increase in the stock price last week, public companies profited the most, but institutions who own 18% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Enel Chile.

View our latest analysis for Enel Chile

ownership-breakdown
SNSE:ENELCHILE Ownership Breakdown January 29th 2024

What Does The Institutional Ownership Tell Us About Enel Chile?

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.

Enel Chile already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Enel Chile, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SNSE:ENELCHILE Earnings and Revenue Growth January 29th 2024

We note that hedge funds don't have a meaningful investment in Enel Chile. Our data shows that Enel SpA is the largest shareholder with 64% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 1.6% and 1.4%, of the shares outstanding, respectively.

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

Insider Ownership Of Enel Chile

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Enel Chile. 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 64% of Enel Chile stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Take risks for example - Enel Chile has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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.