Private companies investing in Lhyfe SA (EPA:LHYFE) bore the brunt of last week’s €29 million drop in market capitalization

Key insights

  • Lhyfe’s significant ownership of private companies suggests that its key decisions are influenced by shareholders from the wider public
  • 52% of the company is owned by the four largest shareholders
  • Insiders own 19% of Lhyfe

A look at Lhyfe SA (EPA:LHYFE) shareholders can tell us which group is the most powerful. With a 33% stake, private companies own the maximum shares in the company. In other words, the group will gain the most (or lose the most) from their investment in the company.

When the market capitalization fell to €176 million last week, private companies would have faced the biggest losses than any other company shareholder group.

Let’s take a deeper look at each type of Lhyfe owner, starting with the diagram below.

Check out our latest analysis for Lhyfe

ENXTPA:LHYFE ownership distribution June 15, 2024

What does institutional ownership tell us about Lhyfe?

Many institutions measure their performance using an index that approximates the local market. So they tend to pay more attention to companies included in the major indices.

We can see that Lhyfe has institutional investors; and they own a large portion of the company’s stock. This indicates some credibility among professional investors. But we can’t rely on that fact alone, as institutions sometimes make bad investments, just like everyone else. It is not unusual to see a big share price drop if two large institutional investors try to sell off a stock at the same time. So it’s worth checking out Lhyfe’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

ENXTPA:LHYFE earnings and revenue growth June 15, 2024

We note that hedge funds have no meaningful investment in Lhyfe. With a 19% stake, CEO Matthieu Guesné is the largest shareholder. Meanwhile, the second and third largest shareholders own 16% and 9.8% of the outstanding shares, respectively.

Our research also uncovered the fact that roughly 52% of the company is controlled by its four largest shareholders, suggesting that these owners exert significant influence over the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. There is some analyst attention on the stock, but it could become even better known over time.

Insider owned by Lhyfe

The definition of an insider may vary slightly from country to country, but board members always count. Company management runs the company, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, sometimes too much power is concentrated within this group.

It appears that insiders own a significant portion of Lhyfe SA. Insiders have a €34 million stake in this €176 million company. We’d say this shows alignment with shareholders, but it’s worth noting that the company is still quite small; some insiders may have founded the company. You can click here to see if those insiders have been buying or selling.

General public property

The general public – including private investors – owns a 28% stake in the company and therefore cannot be easily ignored. While this size of ownership may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policy.

Private equity ownership

Private equity firms have a 5.3% stake in Lhyfe. This suggests that they can influence important policy decisions. Sometimes we see that private equity sticks around for the long term, but generally they have a shorter investment horizon and – as the name suggests – do not invest much in listed companies. After some time, they may try to sell and redeploy their capital elsewhere.

Owned by a private company

It appears that private companies own 33% of Lhyfe shares. It is difficult to draw conclusions based on this fact alone, so it is worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Owned by a public company

It seems to us that public companies own 8.6% of Lhyfe. We don’t know for sure, but it’s entirely possible that this is a strategic deployment. The companies can be similar or work together.

Next steps:

I find it very interesting to see who exactly owns a company. But to gain real insight, we must also consider other information. For example, we discovered it 3 Warning Signs for Lhyfe which you should be aware of before investing here.

If you’re like me, you might want to think about whether this company will grow or shrink. Luckily, you can check out this free report showing analyst forecasts for the future.

Please note: The figures in this article have been calculated based on data from the past twelve months, which relates to the twelve-month period ending on the last date of the month in which the annual accounts are dated. This may not correspond to the figures in the full annual report.

Valuation is complex, but we help make it simple.

Find out if Lhyfe may be over or undervalued by checking out our comprehensive analysis, including: fair value estimates, risks and cautions, dividends, insider transactions and financial health.

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.

Valuation is complex, but we help make it simple.

Find out if Lhyfe may be over or undervalued by checking out our comprehensive analysis, including: fair value estimates, risks and cautions, dividends, insider transactions and financial health.

View the Free Analysis

Do you have feedback on this article? Worried about the content? Please contact us directly. You can also send an email to [email protected]