LVMH Moët Hennessy - Louis Vuitton, Société Européenne's (EPA:MC) market cap dropped €19b last week; Private companies bore the brunt

Simply Wall St · 07/08/2023 08:45

Key Insights

A look at the shareholders of LVMH Moët Hennessy - Louis Vuitton, Société Européenne (EPA:MC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies as a group endured the highest losses last week after market cap fell by €19b.

Let's take a closer look to see what the different types of shareholders can tell us about LVMH Moët Hennessy - Louis Vuitton Société Européenne.

View our latest analysis for LVMH Moët Hennessy - Louis Vuitton Société Européenne

ownership-breakdown
ENXTPA:MC Ownership Breakdown July 8th 2023

What Does The Institutional Ownership Tell Us About LVMH Moët Hennessy - Louis Vuitton Société Européenne?

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.

LVMH Moët Hennessy - Louis Vuitton Société Européenne already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at LVMH Moët Hennessy - Louis Vuitton Société Européenne's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
ENXTPA:MC Earnings and Revenue Growth July 8th 2023

Hedge funds don't have many shares in LVMH Moët Hennessy - Louis Vuitton Société Européenne. Our data shows that Groupe familial Arnault is the largest shareholder with 48% of shares outstanding. Capital Research and Management Company is the second largest shareholder owning 3.0% of common stock, and BlackRock, Inc. holds about 2.5% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of LVMH Moët Hennessy - Louis Vuitton Société Européenne

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in LVMH Moët Hennessy - Louis Vuitton Société Européenne. 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

We can see that Private Companies own 48%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand LVMH Moët Hennessy - Louis Vuitton Société Européenne better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.