- Significant insider control over Rovio Entertainment Oyj implies vested interests in company growth
- The top 6 shareholders own 53% of the company
- own 29% of Rovio Entertainment Oyj
A look at the shareholders of Rovio Entertainment Oyj (HEL:ROVIO) can tell us which group is most powerful. The group holding the most number of shares in the company, around 43% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
Clearly, insiders benefitted the most after the company’s market cap rose by €148m last week.
Let’s take a closer look to see what the different types of shareholders can tell us about Rovio Entertainment Oyj.
Check out our latest analysis for Rovio Entertainment Oyj
What Does The Institutional Ownership Tell Us About Rovio Entertainment Oyj?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Rovio Entertainment Oyj. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Rovio Entertainment Oyj’s historic earnings and revenue below, but keep in mind there’s always more to the story.
Rovio Entertainment Oyj is not owned by hedge funds. The company’s largest shareholder is Kaj Hed, with ownership of 17%. The second and third largest shareholders are Camilla Hed-Wilson and Jonathan Ole Hed, with an equal amount of shares to their name at 8.5%.
On further inspection, we found that more than half the company’s shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Rovio Entertainment Oyj
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that insiders maintain a significant holding in Rovio Entertainment Oyj. Insiders have a €251m stake in this €586m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public– including retail investors — own 29% stake in the company, and hence can’t easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
It’s always worth thinking about the different groups who own shares in a company. But to understand Rovio Entertainment Oyj better, we need to consider many other factors. Case in point: We’ve spotted 2 warning signs for Rovio Entertainment Oyj you should be aware of, and 1 of them can’t be ignored.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
Valuation is complex, but we’re helping make it simple.
Find out whether Rovio Entertainment Oyj is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
View the Free Analysis
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.