Enel Chile SA (SNSE:ENELCHILE) share price fell 8.6% last week; public companies would not be happy
To get an idea of who actually controls Enel Chile SA (SNSE:ENELCHILE), it is important to understand the ownership structure of the company. The group with the largest number of shares in the company, around 65% to be precise, are the public companies. In other words, the group faces the maximum upside potential (or downside risk).
And last week, public companies suffered the biggest losses, with the stock dropping 8.6%.
In the table below, we zoom in on the different ownership groups of Enel Chile.
Check out our latest analysis for Enel Chile
What does institutional ownership tell us about Enel Chile?
Institutional investors typically 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.
Enel Chile already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Enel Chile’s historic earnings and revenue below, but keep in mind there’s always more to tell.
We note that hedge funds have no significant investment in Enel Chile. Enel SpA is currently the main shareholder, with 65% of the outstanding shares. This essentially means that they have considerable influence, if not absolute control, over the future of the company. In comparison, the second and third shareholders hold approximately 2.0% and 1.5% of the shares.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Insider ownership of Enel Chile
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our data does not allow us to confirm that the members of the board of directors personally hold shares. Not all jurisdictions have the same rules regarding insider ownership disclosure, and we may be missing something here. So you can click here to learn more about the CEO.
General public property
The general public, including retail investors, owns 18% of the company’s capital and therefore cannot be easily ignored. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
Ownership of a public company
Public companies currently hold 65% of Enel Chile’s shares. We cannot be sure, but it is quite possible that it is a strategic issue. Businesses can be similar or work together.
It is always useful to think about the different groups that own shares in a company. But to better understand Enel Chile, we must take into account many other factors. For example, we have identified 2 warning signs for Enel Chile (1 is concerning) that you should be aware of.
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.