Could the ownership structure of UPM-Kymmene Oyj (HEL:UPM) tell us anything useful?

If you want to know who really controls UPM-Kymmene Oyj (HEL:UPM), then you’ll have to look at the makeup of their share registry. Big companies usually have institutions as shareholders, and we usually see insiders owning shares in small companies. Companies that were previously publicly owned tend to have less insider ownership.

UPM-Kymmene Oyj is quite a large company. It has a market capitalization of 16 billion euros. Normally, institutions own a significant share of a business of this size. Our analysis of company ownership, below, shows that institutional investors have bought the company. Let’s take a closer look at what different types of shareholders can tell us about UPM-Kymmene Oyj.

Check out our latest analysis for UPM-Kymmene Oyj

HLSE: distribution of UPM ownership on July 10, 2022

What does institutional ownership tell us about UPM-Kymmene Oyj?

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.

As you can see, institutional investors hold a sizeable share of UPM-Kymmene Oyj. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see UPM-Kymmene Oyj’s historical revenue and earnings below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
HLSE: UPM profit and revenue growth 10 July 2022

UPM-Kymmene Oyj does not belong to hedge funds. Our data shows that BlackRock, Inc. is the largest shareholder with 3.8% of shares outstanding. Meanwhile, the second and third largest shareholders hold 3.7% and 2.6% of the outstanding shares respectively.

A closer look at our ownership data shows that the top 25 shareholders collectively own less than half of the ledger, suggesting a large group of small shareholders where no single shareholder has a majority.

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 a stock’s expected performance. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Insider ownership of UPM-Kymmene Oyj

The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

We can report that insiders hold shares in UPM-Kymmene Oyj. It is a very large company and the members of the board of directors collectively own 184 million euros in shares (at current prices). sometimes we are interested in whether they bought or sold.

General public property

The general public, including retail investors, owns 55% of UPM-Kymmene Oyj. This size of ownership gives mainstream investors a certain collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed corporate acquisitions.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. Know that UPM-Kymmene Oyj shows 1 warning sign in our investment analysis you should know…

At the end of the day the future is the most important. You can access this free analyst forecast report for the company.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.