Posted on September 5, 2023
Key Insights
- Significantly high institutional ownership implies Arcadis’ stock price is sensitive to their trading actions
- 50% of the business is held by the top 9 shareholders
- Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
If you want to know who really controls Arcadis NV (AMS:ARCAD), then you’ll have to look at the makeup of its share registry. With 59% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
In the chart below, we zoom in on the different ownership groups of Arcadis.
ENXTAM:ARCAD Ownership Breakdown September 1st 2023
What Does The Institutional Ownership Tell Us About Arcadis?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Arcadis does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Arcadis’ historic earnings and revenue below, but keep in mind there’s always more to the story.
ENXTAM:ARCAD Earnings and Revenue Growth September 1st 2023
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Arcadis is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Stichting Lovinklaan with 18% of shares outstanding. With 10.0% and 4.0% of the shares outstanding respectively, Stichting Pensioenfonds ABP and KNHM Participaties BV are the second and third largest shareholders.
On further inspection, we found that more than half the company’s shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Arcadis
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
We can see that insiders own shares in Arcadis NV. This is a big company, so it is good to see this level of alignment. Insiders own €64m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Arcadis. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 18%, of the company’s shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we’ve identified 3 warning signs for Arcadis (1 doesn’t sit too well with us) that you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
