Individual investors invested in Nagarro SE (ETR:NA9) copped the brunt of last week's €52m market cap decline

Key Insights

• The considerable ownership by individual investors in Nagarro indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 10 shareholders
• Insiders own 12% of Nagarro

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If you want to know who really controls Nagarro SE (ETR:NA9), 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 individual investors with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to €646m last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for Nagarro

What Does The Institutional Ownership Tell Us About Nagarro?

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.

We can see that Nagarro does have institutional investors; and they hold a good portion of the company's stock. 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 Nagarro's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Nagarro. Looking at our data, we can see that the largest shareholder is Lantano Beteiligungen GmbH with 21% of shares outstanding. Vikram Sehgal is the second largest shareholder owning 6.9% of common stock, and All Nag Beteiligungs-GmbH & Co. KG holds about 6.2% of the company stock. Vikram Sehgal, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Nagarro

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

It seems insiders own a significant proportion of Nagarro SE. It has a market capitalization of just €646m, and insiders have €80m worth of shares in their own names. 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, who are usually individual investors, hold a 48% stake in Nagarro. 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.

Private Company Ownership

We can see that Private Companies own 27%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Nagarro has 1 warning sign we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

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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.