Institutional investors have a lot riding on Construcciones y Auxiliar de Ferrocarriles, S.A. (BME:CAF) with 37% ownership

Key Insights

• Significantly high institutional ownership implies Construcciones y Auxiliar de Ferrocarriles' stock price is sensitive to their trading actions
• The top 5 shareholders own 51% of the company
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of Construcciones y Auxiliar de Ferrocarriles, S.A. (BME:CAF) can tell us which group is most powerful. We can see that institutions own the lion's share in the company 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).

Last week’s 4.2% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 37%.

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

Check out 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.

Construcciones y Auxiliar de Ferrocarriles 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. 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 24%. BBK Gestion SGIIC SA is the second largest shareholder owning 14% of common stock, and Global Portfolio Investments, S. L. holds about 5.0% of the company stock.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

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. 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.

Our information suggests that Construcciones y Auxiliar de Ferrocarriles, S.A. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around €1.1m worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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

It seems that Private Companies own 37%, of the Construcciones y Auxiliar de Ferrocarriles 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.

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. For example, we've discovered 1 warning sign for Construcciones y Auxiliar de Ferrocarriles that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.