Sanoma Oyj (HEL:SANOMA) has caught the attention of institutional investors who hold a sizeable 46% stake

Simply Wall St · 08/31 05:05

Key Insights

  • Significantly high institutional ownership implies Sanoma Oyj's stock price is sensitive to their trading actions
  • A total of 5 investors have a majority stake in the company with 53% ownership
  • Insider ownership in Sanoma Oyj is 17%

Every investor in Sanoma Oyj (HEL:SANOMA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 46% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

Let's delve deeper into each type of owner of Sanoma Oyj, beginning with the chart below.

View our latest analysis for Sanoma Oyj

ownership-breakdown
HLSE:SANOMA Ownership Breakdown August 31st 2024

What Does The Institutional Ownership Tell Us About Sanoma Oyj?

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.

Sanoma Oyj already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Sanoma Oyj, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
HLSE:SANOMA Earnings and Revenue Growth August 31st 2024

We note that hedge funds don't have a meaningful investment in Sanoma Oyj. The company's largest shareholder is Jane and Aatos Erkko Foundation, Endowment Arm, with ownership of 24%. In comparison, the second and third largest shareholders hold about 13% and 7.5% of the stock.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 Sanoma Oyj

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders maintain a significant holding in Sanoma Oyj. Insiders own €184m worth of shares in the €1.1b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 13%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Sanoma Oyj that you should be aware of before investing here.

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.