Hedge funds investors are Bilfinger SE’s (ETR:GBF) biggest bettors and were rewarded after last week’s €52m market cap gain

Key Insights

• Institutions’ substantial holdings in Bilfinger implies that they have significant influence over the company’s share price
• A total of 5 investors have a majority stake in the company with 53% ownership
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Bilfinger SE (ETR:GBF), then you’ll have to look at the makeup of its share registry. We can see that hedge funds own the lion’s share in the company with 40% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And things are looking up for hedge funds investors after the company gained €52m in market cap last week. One-year return to shareholders is currently 24% and last week’s gain was the icing on the cake.

Let’s delve deeper into each type of owner of Bilfinger, beginning with the chart below.

See our latest analysis for Bilfinger

What Does The Institutional Ownership Tell Us About Bilfinger?

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.

As you can see, institutional investors have a fair amount of stake in Bilfinger. 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. 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 Bilfinger’s historic earnings and revenue below, but keep in mind there’s always more to the story.

It looks like hedge funds own 40% of Bilfinger shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Cevian Capital AB is currently the largest shareholder, with 27% of shares outstanding. Ena Investment Capital Llp is the second largest shareholder owning 13% of common stock, and JP Morgan Asset Management holds about 6.0% of the company stock.

On looking further, we found that 53% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 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 Bilfinger

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.

We note our data does not show any board members 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

The general public– including retail investors — own 25% 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.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Bilfinger better, we need to consider many other factors. Be aware that Bilfinger is showing 3 warning signs in our investment analysis , you should know about…

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

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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.