Construcciones y Auxiliar de Ferrocarriles, S.A.'s (BME:CAF) largest shareholders are private companies who were rewarded as market cap surged €75m last week

Key Insights

• Significant control over Construcciones y Auxiliar de Ferrocarriles by private companies implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 5 shareholders
• Institutional ownership in Construcciones y Auxiliar de Ferrocarriles is 28%

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If you want to know who really controls Construcciones y Auxiliar de Ferrocarriles, S.A. (BME:CAF), 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 private companies with 37% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies were the biggest beneficiaries of last week’s 4.2% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Construcciones y Auxiliar de Ferrocarriles.

View our latest analysis for Construcciones y Auxiliar de Ferrocarriles

What Does The Institutional Ownership Tell Us About Construcciones y Auxiliar de Ferrocarriles?

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 Construcciones y Auxiliar de Ferrocarriles 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 Construcciones y Auxiliar de Ferrocarriles' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Construcciones y Auxiliar de Ferrocarriles. Cartera Social, S.A. is currently the company's largest shareholder with 24% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 5.2% of the stock.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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.

Insider Ownership Of Construcciones y Auxiliar de Ferrocarriles

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our data suggests that insiders own under 1% of Construcciones y Auxiliar de Ferrocarriles, S.A. in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own €1.7m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 35% stake in Construcciones y Auxiliar de Ferrocarriles. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 37%, of the Construcciones y Auxiliar de Ferrocarriles stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Construcciones y Auxiliar de Ferrocarriles , and understanding them should be part of your investment process.

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.