Ralph Dommermuth United Internet AG's (ETR:UTDI) CEO is the most bullish insider, and their stock value gained 4.5%last week

Key Insights

• United Internet's significant insider ownership suggests inherent interests in company's expansion
• 54% of the company is held by a single shareholder (Ralph Dommermuth)
• Institutions own 21% of United Internet

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Every investor in United Internet AG (ETR:UTDI) should be aware of the most powerful shareholder groups. With 54% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 4.5% gain.

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

Check out our latest analysis for United Internet

What Does The Institutional Ownership Tell Us About United Internet?

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.

United Internet already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 United Internet's historic earnings and revenue below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 5.6% of United Internet. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. With a 54% stake, CEO Ralph Dommermuth is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. With 5.6% and 5.5% of the shares outstanding respectively, Helikon Investments Limited and Bank of America Corporation, Asset Management Arm are the second and third largest shareholders.

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

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the United Internet AG stock. This gives them a lot of power. That means insiders have a very meaningful €2.0b stake in this €3.6b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over United Internet. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for United Internet you should know about.

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.