Could The Construcciones y Auxiliar de Ferrocarriles, S.A. (BME:CAF) Ownership Structure Tell Us Something Useful?

A look at the shareholders of Construcciones y Auxiliar de Ferrocarriles, S.A. (BME:CAF) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

Construcciones y Auxiliar de Ferrocarriles isn't enormous, but it's not particularly small either. It has a market capitalization of €1.2b, which means it would generally expect to see some institutions on the share registry. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Construcciones y Auxiliar de Ferrocarriles.

See 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.

As you can see, institutional investors have a fair amount of stake in Construcciones y Auxiliar de Ferrocarriles. 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.

Construcciones y Auxiliar de Ferrocarriles is not owned by hedge funds. The company's largest shareholder is Cartera Social, S.A., with ownership of 25%. With 14% and 5.0% of the shares outstanding respectively, Kutxabank Gestion, SGIIC , S.A. and Indumenta Pueri, S.L. are the second and third largest shareholders.

Our research also brought to light the fact that roughly 52% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Construcciones y Auxiliar de Ferrocarriles

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our most recent data indicates that insiders own less than 1% of Construcciones y Auxiliar de Ferrocarriles, S.A.. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate 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 €63k worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a 21% stake in Construcciones y Auxiliar de Ferrocarriles. 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 30%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Construcciones y Auxiliar de Ferrocarriles better, we need to consider many other factors. Take risks for example - Construcciones y Auxiliar de Ferrocarriles has 4 warning signs (and 1 which makes us a bit uncomfortable) we think 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. 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.
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