Key Insights

• Institutions' substantial holdings in Evonik Industries implies that they have significant influence over the company's share price

• 56% of the company is held by a single shareholder (RAG Foundation, Endowment Arm)

• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Evonik Industries AG (ETR:EVK), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 82% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And things are looking up for institutional investors after the company gained €422m in market cap last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 12%.

Let's take a closer look to see what the different types of shareholders can tell us about Evonik Industries.

See our latest analysis for Evonik Industries

What Does The Institutional Ownership Tell Us About Evonik Industries?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Evonik Industries already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Evonik Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Evonik Industries. Our data shows that RAG Foundation, Endowment Arm is the largest shareholder with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 5.2% of the shares outstanding, followed by an ownership of 4.9% by the third-largest shareholder.

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