Grifols, S.A.’s (BME:GRF) latest 16% decline adds to one-year losses, institutional investors may consider drastic measures

Important Findings

  • Significantly high institutional ownership implies that Grifols’ stock price is sensitive to its trading activity
  • 51% of the company is held by the 18 largest shareholders
  • Analyst forecasts along with ownership data serve to provide a strong idea of ​​a company’s prospects

A look at Grifols, SA (BME:GRF) shareholders can tell us which group is the strongest. And the group holding the biggest piece of the pie are institutions with 43% ownership. In other words, the group will gain the most (or lose the most) from their investment in the company.

It follows that institutional investors were the hardest-hit group after the company’s market cap fell 16% to €5.1 billion last week following a fall in the share price. Needless to say, the recent loss, which further adds to shareholders’ 47% one-year loss, may not go down well with this particular category of shareholders. Institutions or “liquidity providers” control large sums of money and therefore these types of investors usually have a large influence on stock price movements. Therefore, if the decline continues, institutional investors could be pressured to sell Grifols, which could hurt individual investors.

In the table below we enlarge the different ownership groups of Grifols.

Check out our latest analysis for Grifols

BME: GRF ownership breakdown March 21, 2023

What does institutional ownership tell us about Grifols?

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

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Grifols already has institutions in the share register. In fact, they own a respectable stake in the company. This may indicate that the company has a certain level of credibility in the investor community. However, it’s best not to rely on the supposed confirmation that comes from institutional investors. They too are sometimes wrong. When multiple institutions own a stock, there is always a risk that they will find themselves in a “crowded trade”. When such a trade goes awry, multiple parties can compete to sell shares quickly. This risk is higher in a company without a growth history. You can see Grifols historical earnings and earnings below, but remember there’s still more to be told.

BME:GRF earnings and revenue growth March 21, 2023

We find that hedge funds have no meaningful investment in Grifols. The company’s largest shareholder is Capital Research and Management Company with a 13% stake. For comparison, the second-largest shareholder holds about 5.8% of the outstanding shares, followed by a 5.3% stake from the third-largest shareholder.

After investigating further, we found that the top 18 collectively own 51% of the company, suggesting that no single shareholder has significant control over the company.

While examining a company’s institutional ownership can add value to your research, it’s also a good practice to research analyst recommendations to gain a deeper understanding of a stock’s expected performance. There are a fair number of analysts covering the stock, so it might be helpful to get their overall view on the future.

Insider ownership of Grifols

While the precise definition of an insider can be subjective, almost everyone considers a board member to be an insider. Management runs the business, but the CEO is accountable to the board even if he or she is a member.

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

Our latest data shows that insiders own less than 1% of Grifols, SA. However, we note that insiders may have an indirect interest through a private company or other corporate structure. It’s a fairly large company, so it would be possible for directors to own a significant interest in the company without owning a large proportionate interest. In this case, they own shares worth around €11 million (at current prices). It’s arguably just as important to consider recent buying and selling. You can click here to see if Insiders bought or sold.

General Public Property

With a stake of 36%, the general public, consisting mainly of individual investors, has some influence on Grifols. While this group may not necessarily be in charge, it certainly can have a real impact on how the company is run.

Private Equity Ownership

Private equity companies hold a 5.3% stake in Grifols. This indicates that they can influence important political decisions. This might encourage some investors, as private equity is sometimes able to promote strategies that help the market see the value of the company. Alternatively, these holders could exit the investment after listing it publicly.

Private company property

We can see that private companies own 15% of the issued shares. It’s hard to draw any conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in stock in a public company through a separate private company.

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Next Steps:

It’s always worth thinking about the different groups that own shares in a company. But to better understand Grifols, we need to consider many other factors. For example risks. Every company has them and we discovered them 3 warning signs for Grifols (1 of which can’t be ignored!) you should know.

If you’d rather learn what analysts are predicting for future growth, don’t miss this one free Analyst forecast report.

Note: The figures in this article are calculated using data for the last twelve months, relating to the 12-month period ending on the last date of the month to which the financial statements are dated. This may not tally with the annual report figures for the full year.

The assessment is complex, but we help to simplify it.

Find out if Grifols might be over or undervalued by checking out our comprehensive analysis which includes the following Fair Value Estimates, Risks and Warnings, Dividends, Insider Trading and Financial Health.

Check out the free analysis

This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using 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 goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.


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