Advertisement
U.S. markets open in 5 hours 30 minutes
  • S&P Futures

    5,305.00
    -3.25 (-0.06%)
     
  • Dow Futures

    40,106.00
    -38.00 (-0.09%)
     
  • Nasdaq Futures

    18,503.50
    -0.25 (-0.00%)
     
  • Russell 2000 Futures

    2,135.00
    -3.40 (-0.16%)
     
  • Crude Oil

    81.74
    +0.39 (+0.48%)
     
  • Gold

    2,214.00
    +1.30 (+0.06%)
     
  • Silver

    24.61
    -0.14 (-0.57%)
     
  • EUR/USD

    1.0805
    -0.0025 (-0.23%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    12.94
    +0.16 (+1.25%)
     
  • GBP/USD

    1.2617
    -0.0021 (-0.17%)
     
  • USD/JPY

    151.4030
    +0.1570 (+0.10%)
     
  • Bitcoin USD

    70,391.42
    +658.23 (+0.94%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,931.98
    +1.02 (+0.01%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

What Kind Of Shareholder Owns Most Red Eléctrica Corporación SA (BME:REE) Stock?

The big shareholder groups in Red Eléctrica Corporación SA (BME:REE) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.

With a market capitalization of €9.9b, Red Eléctrica Corporación is rather large. We’d expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Taking a look at the our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about REE.

Check out our latest analysis for Red Eléctrica Corporación

BME:REE Ownership Summary October 31st 18
BME:REE Ownership Summary October 31st 18

What Does The Institutional Ownership Tell Us About Red Eléctrica Corporación?

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 own 33% of Red Eléctrica Corporación. 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. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Red Eléctrica Corporación’s historic earnings and revenue, below, but keep in mind there’s always more to the story.

BME:REE Income Statement Export October 31st 18
BME:REE Income Statement Export October 31st 18

Red Eléctrica Corporación is not owned by hedge funds. 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 Red Eléctrica Corporación

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own less than 1% of Red Eléctrica Corporación SA. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. As it is a large company, we’d only expect insiders to own a small percentage of it. But it’s worth noting that they own €244k worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 47% stake in REE. 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

It seems that Private Companies own 20%, of the REE stock. 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:

It’s always worth thinking about the different groups who own shares in a company. But to understand Red Eléctrica Corporación better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow of 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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Advertisement