How much attention do you pay to a company’s list of shareholders? Does it affect your interest in any way if, for example, a single owner has a very large stake in the company, or if no institutions are found on the list?
I myself became interested in Investors House as a potential investment after listening to their recent Capital Markets Day presentation. However, the list of the company’s largest owners does not include a single institution, and this raises quite a few questions for me. I practically always check the largest owners of companies that interest me, so at least for me, shareholders matter.
Of course, we can now take Sampo, for example, as Nordea’s largest owner. They surely want to drive Nordea forward, creating shareholder value. On the other hand, if a company is a potential “acquisition target,” then if an owner immediately holds 10%+ alone, that can already deter the entire deal.
Of course, lists are important, but the problem is that any single owner, whether institutional or private, can be very unpredictable in their moves. When selling starts, institutions will sell just as eagerly, regardless of the price. Hopefully, MH doesn’t read these things…
It’s worth glancing at the owner list – at least the top end – especially in smaller companies. You can infer a lot from the owners’ commitment and their buy-sell movements. For example, in Citycon’s case, the largest shareholder’s continuous purchases inspire confidence.
For me, owners have had a positive impact in at least the following: Sampo, eQ, Kone. These also happen to be my three largest holdings, albeit in a different order. They have grown over the years and have also generated a large amount of dividends.
I looked at the worst-performing companies in the last 10 years, and many of them had a large, identifiable owner who still influenced the company through board work, meaning it wasn’t just a financial investment. Yet, their stock prices plummeted. So, a bad major owner can be a disaster for a company’s owners. Ownership matters – a bad major owner can destroy a significant amount of their own and investors’ wealth. Conversely, a good major owner can create a lot of value.
Then there’s another group where an institution (cooperative, foundation, state, etc.) owns a large chunk of the company and influences it through board work. Among these, the state has sometimes been criticized as an unclear owner, potentially having different interests than other investors. The same applies to some cooperatives, which can have conflicting interests.
The third group consists of widely owned companies with no major owners. These have professional boards.
I don’t know if there’s a shortcut to happiness, but I would approach companies whose major owner / board chairman has a poor track record with some reservations. When you can’t get rid of a major owner, a bad run can continue for decades.