Ralph Dommermuth United Internet AG's (ETR:UTDI) CEO is the most bullish insider, and their stock value gained 4.6%last week

Key Insights

• Significant insider control over United Internet implies vested interests in company growth
• The largest shareholder of the company is Ralph Dommermuth with a 54% stake
• Institutions own 24% of United Internet

If you want to know who really controls United Internet AG (ETR:UTDI), 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 insiders with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit €3.4b market cap following a 4.6% gain in the stock.

In the chart below, we zoom in on the different ownership groups of United Internet.

See our latest analysis for United Internet

What Does The Institutional Ownership Tell Us About United Internet?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in United Internet. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of United Internet, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in United Internet. With a 54% stake, CEO Ralph Dommermuth is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. Meanwhile, the second and third largest shareholders, hold 5.5% and 3.3%, of the shares outstanding, respectively.

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 United Internet

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 that insiders own more than half the United Internet AG stock. This gives them a lot of power. Insiders own €1.9b worth of shares in the €3.4b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over United Internet. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand United Internet better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for United Internet you should be aware of, and 1 of them doesn't sit too well with us.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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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.