Sanoma Oyj's (HEL:SANOMA) recent 4.7% pullback adds to one-year year losses, institutional owners may take drastic measures

Simply Wall St · 09/15/2023 06:21

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 52% ownership
  • Insider ownership in Sanoma Oyj is 17%

To get a sense of who is truly in control of Sanoma Oyj (HEL:SANOMA), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, institutional investors endured the highest losses last week after market cap fell by €52m. The recent loss, which adds to a one-year loss of 49% for stockholders, may not sit well with this group of investors. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the downtrend continues, institutions may face pressures to sell Sanoma Oyj, which might have negative implications on individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Sanoma Oyj.

See our latest analysis for Sanoma Oyj

ownership-breakdown
HLSE:SANOMA Ownership Breakdown September 15th 2023

What Does The Institutional Ownership Tell Us About Sanoma Oyj?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Sanoma Oyj does have institutional investors; and they hold a good portion of the company's stock. 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. 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 September 15th 2023

Hedge funds don't have many shares in Sanoma Oyj. The company's largest shareholder is Jane and Aatos Erkko Foundation, Endowment Arm, with ownership of 24%. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 7.5% by the third-largest shareholder.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 Sanoma Oyj

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.

Our information suggests that insiders maintain a significant holding in Sanoma Oyj. It has a market capitalization of just €1.1b, and insiders have €177m worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 25% 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 Company Ownership

It seems that Private Companies own 12%, of the Sanoma Oyj stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 - Sanoma Oyj has 4 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.