Could the ownership structure of Kering SA (EPA: KER) tell us anything useful?

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The large groups of shareholders of Kering SA (EPA: KER) have power over the company. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. Companies that were previously state-owned tend to have fewer insiders.

With a market capitalization of 83 billion euros, Kering is rather big. We would expect to see institutional investors on the register. Companies of this size are also generally well known to retail investors. Looking at our data on ownership groups (below), it appears that institutions own shares in the company. We can zoom in on the different ownership groups, to find out more about Kering.

See our latest analysis for Kering

ENXTPA: KER Distribution of ownership November 28, 2021

What does institutional ownership tell us about Kering?

Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.

We see that Kering has institutional investors; and they own a large portion of the company’s stock. This implies that analysts working for these institutions have reviewed the action and appreciate it. But like everyone else, they could be wrong. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell shares quickly. This risk is higher in a company with no history of growth. You can see Kering’s historical revenue and revenue below, but keep in mind that there is always more to tell.

profit and revenue growth
ENXTPA: KER Earnings and revenue growth November 28, 2021

Hedge funds don’t have a lot of Kering stocks. Financière Pinault SCA is currently the largest shareholder of the company with 42% of the shares outstanding. In comparison, the second and third shareholders hold around 5.2% and 3.6% of the capital.

A more detailed study of the register of shareholders showed us that 3 of the main shareholders hold a considerable share of the ownership of the company, through their 50% stake.

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 the expected performance of a stock. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.

Kering insider ownership

The definition of an insider may differ slightly from country to country, but board members still count. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.

Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own less than 1% of Kering SA in their own name. However, it is possible that insiders will have an indirect interest through a more complex structure. It’s a very large company, so it would be surprising to see insiders owning a large part of the company. Although their holding is less than 1%, we see that the directors collectively hold 194 million euros in shares (at current prices). In this kind of situation, it may be more interesting to see if these insiders have bought or sold.

General public property

The general public, including retail investors, own a 30% stake in the company and therefore cannot be easily ignored. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.

Owned by a private company

It seems that private companies hold 42% of Kering’s capital. It might be worth pursuing the matter 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.

Next steps:

I find it very interesting to see who exactly owns a company. But to really understand better, we have to take other information into account as well.

I always like to check a history of revenue growth. You can also, by accessing this free table of historical income and earnings in this detailed graphic.

But finally it’s the future, not the past, which will determine the success of the owners of this business. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better future.

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.

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 has no position in the mentioned stocks.

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