Eurazeo SE (EPA:RF) share price fell 14% last week; private companies would not be happy

To get an idea of ​​who actually controls Eurazeo SE (EPA:RF), it is important to understand the ownership structure of the company. With 34% of the capital, private companies hold the maximum shares in the company. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.

As a result, private companies as a group suffered the highest losses last week after the market capitalization fell by 752 million euros.

In the chart below, we zoom in on Eurazeo’s different shareholder groups.

See our latest analysis for Eurazeo

ENXTPA: RF Property Distribution June 20, 2022

What does institutional ownership tell us about Eurazeo?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

Eurazeo already has establishments 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. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. It is therefore worth looking at Eurazeo’s earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
ENXTPA: RF Earnings and Revenue Growth June 20, 2022

Eurazeo is not owned by hedge funds. JCDecaux Holding SAS is currently the largest shareholder, with 18% of the shares in circulation. With respectively 5.8% and 4.3% of the outstanding shares, Succession Eliane David Weill and Indivision MDW are the second and third shareholders.

Looking at the shareholder register, we can see that 51% of the ownership is controlled by the top 15 shareholders, which means that no shareholder has a majority stake in the ownership.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Eurazeo Insider Ownership

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.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant stake in Eurazeo SE. It has a market cap of just €4.7 billion and insiders hold €636 million worth of shares in their own name. It is quite significant. Most would be delighted to see the board investing alongside them. You may want to access this free chart showing recent insider trades.

General public property

The general public, generally individual investors, holds 33% of Eurazeo’s capital. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Private Company Ownership

Private companies seem to hold 34% of Eurazeo’s capital. It might be worth exploring this 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 company.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. Take for example the ubiquitous specter of investment risk. We have identified 3 warning signs with Eurazeo (at least 1 which makes us a little uneasy), and understanding them should be part of your investment process.

At the end of the day the future is the most important. You can access this free analyst forecast report for the company.

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.

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.

Karen J. Nelson