HelloFresh SE’s (ETR:HFG) Latest 6.4% Drop Adds to One-Year Losses, Institutional Investors May Consider Drastic Actions

Key ideas

• Institutions’ significant stakes in HelloFresh imply that they have significant influence over the company’s stock price.
• 51% of the company is owned by the 18 largest shareholders
• By using analyst forecast data as well as ownership research, one can better assess a company’s future performance.

Every investor in HelloFresh SE (ETR:HFG) should be aware of the most powerful shareholder groups. The group holding the largest number of shares in the company, around 48% to be precise, are institutions. In other words, the group will benefit the most if the stock rises (or lose the most if the stock goes down).

And institutional investors suffered the biggest losses after the company’s stock price fell 6.4% last week. This set of investors may be particularly concerned about the current loss, which adds to a year-over-year loss of 73% for shareholders. Often referred to as “market participants,” institutions wield significant power to influence the price dynamics of any stock. Therefore, if HelloFresh’s stock price weakness persists, institutional investors may feel pressured to sell the stock, which may not be ideal for individual investors.

Let’s take a closer look at each HelloFresh owner type, starting with the table below.

Check out our latest analysis for HelloFresh

What does institutional ownership tell us about HelloFresh?

Institutional investors typically compare their own returns to those of a commonly followed index. They therefore generally consider buying larger companies included in the relevant benchmark index.

We see that HelloFresh has institutional investors; and they own a good portion of the company’s shares. This implies that analysts working for these institutions have looked at the stock and like it. But like everyone else, they could be wrong. It is not uncommon to see a big drop in stock price if two large institutional investors try to sell out of a stock at the same time. So it’s worth checking HelloFresh’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

HelloFresh is not owned by hedge funds. Baillie Gifford & Co. is currently the largest shareholder, with 9.5% of shares outstanding. Meanwhile, the second and third largest shareholders hold 5.9% and 3.6% of the outstanding shares, respectively. Dominik Richter, who is the second largest shareholder, also holds the title of managing director.

A closer look at our ownership figures suggests that the top 18 shareholders have a combined stake of 51%, implying that no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be helpful to know their overall view of the future.

Preferred property of HelloFresh

The definition of corporate insiders can be subjective and varies by jurisdiction. Our data reflects individual insiders, capturing board members at a minimum. Management ultimately answers to the board of directors. However, it is not uncommon for managers to be board members, especially if they are a founder or CEO.

Internal ownership is positive when it indicates that management thinks like the true owners of the company. However, strong internal ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our most recent data indicates that insiders own some shares of HelloFresh SE. Its market capitalization is just €921m and insiders own €54m worth of shares, in their own names. Some would say this shows an alignment of interests between shareholders and the board. But it might be worth checking to see if these insiders have been selling.

General public property

With a 44% stake, the general public, consisting mainly of individual investors, has some influence over HelloFresh. While this group can’t necessarily call the shots, they can certainly have a real influence on how the company is run.

Next steps:

It’s always helpful to think about the different groups that own shares in a company. But to better understand HelloFresh, we need to consider many other factors. Take risks for example – HelloFresh has 1 warning sign we think you should be aware of this.

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

NB: The figures in this article are calculated using data for the last twelve months, 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 entire year.

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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 constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term 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 stocks mentioned.