If you want to know who really controls AS LHV Group (TAL: LHV1T), then you will have to look at the makeup of its share register. Insiders often own a large portion of younger and smaller companies, while larger companies tend to have institutions as shareholders. Warren Buffett said he enjoys “a business with sustainable competitive advantages that is led by skilled, owner-oriented people.” So it’s nice to see some insider ownership as it can suggest that the management is owner-driven.
The AS LHV group isn’t huge, but it’s not particularly small either. He has a market capitalization of 1.2 billion euros, which means that he generally expects to see certain institutions listed in the share register. Our analysis of company ownership, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to find out more about AS LHV Group.
Consult our latest analysis for the AS LHV group
What does institutional ownership tell us about the AS LHV group?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
We see that the AS LHV group has institutional investors; and they own a large portion of the company’s stock. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better not to rely on the so-called validation that accompanies institutional investors. They too are sometimes wrong. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. It is therefore worth checking out the trajectory of past profits of the AS LHV group (below). Of course, keep in mind that there are other factors to consider as well.
The AS LHV group is not owned by hedge funds. Looking at our data we can see that the largest shareholder is AS LHV Varahaldus with 12% of the shares outstanding. For context, the second largest shareholder owns around 9.6% of the outstanding shares, followed by an 8.6% stake by the third largest shareholder. Rain Lohmus, who is the third shareholder, also holds the title of Chairman of the Supervisory Board.
Upon closer inspection, we found that more than half of the company’s stock is owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are to some extent offset by the smaller ones.
While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. We do not see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.
Insider ownership of AS LHV group
The definition of an insider may differ slightly from country to country, but board members still count. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in certain circumstances.
Shareholders would probably be interested to learn that insiders hold shares in the AS LHV group. It’s a pretty big company, so it’s generally positive to see a potentially meaningful alignment. In this case, they hold around 114 million euros of shares (at current prices). If you would like to explore the issue of Insider Alignment, you can click here to see if any Insiders have bought or sold.
General public property
With a 38% stake, the general public has some influence over the AS LHV group. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.
Private equity firms hold a 5.8% stake in the AS LHV group. This suggests that they can influence key policy decisions. Sometimes we see private equity sticking around for the long haul, but generally they have a shorter investment horizon and – as the name suggests – don’t invest much in public companies. After a while, they may seek to sell and redeploy the capital elsewhere.
Owned by a private company
Our data indicates that private companies own 34% of the company’s shares. It may be worth pursuing the question further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.
It’s always worth thinking about the different groups that own shares in a company. But to understand AS LHV Group better, there are many other factors that we need to take into account. Take risks for example – AS LHV Group has 1 warning sign we think you should be aware.
Sure this might not be the best stock to buy. Therefore, you may want to see our free set of interesting prospects benefiting from a favorable financial situation.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St does not have any position in the mentioned stocks.
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