private companies who own 42% along with institutions invested in CIE Automotive, S.A. (BME:CIE) saw increase in their holdings value last week

By
Simply Wall St
Published
May 15, 2022
BME:CIE
Source: Shutterstock

A look at the shareholders of CIE Automotive, S.A. (BME:CIE) can tell us which group is most powerful. With 42% stake, private companies 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.

Private companies gained the most after market cap touched €2.6b last week, while institutions who own 21% also benefitted.

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

See our latest analysis for CIE Automotive

ownership-breakdown
BME:CIE Ownership Breakdown May 15th 2022

What Does The Institutional Ownership Tell Us About CIE Automotive?

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 CIE Automotive. 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 CIE Automotive's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
BME:CIE Earnings and Revenue Growth May 15th 2022

Hedge funds don't have many shares in CIE Automotive. Corporación Financiera Alba, S.A. is currently the largest shareholder, with 13% of shares outstanding. With 11% and 9.9% of the shares outstanding respectively, Elidoza Promoción de Empresas, S.L. and Risteel Corporation, B.V. are the second and third largest shareholders. In addition, we found that Jesus Maria Herrera Barandiaran, the CEO has 1.4% of the shares allocated to their name.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 CIE Automotive

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can see that insiders own shares in CIE Automotive, S.A.. The insiders have a meaningful stake worth €37m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 15% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With an ownership of 13%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 42%, of the CIE Automotive stock. 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.

Public Company Ownership

It appears to us that public companies own 7.8% of CIE Automotive. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for CIE Automotive you should be aware of.

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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