private companies who own 30% along with institutions invested in Línea Directa Aseguradora, S.A., Compañía de Seguros y Reaseguros (BME:LDA) saw increase in their holdings value last week

Key Insights

• Significant control over Línea Directa Aseguradora Compañía de Seguros y Reaseguros by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 6 investors have a majority stake in the company with 55% ownership
• 29% of Línea Directa Aseguradora Compañía de Seguros y Reaseguros is held by Institutions

To get a sense of who is truly in control of Línea Directa Aseguradora, S.A., Compañía de Seguros y Reaseguros (BME:LDA), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 30% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Private companies gained the most after market cap touched €1.3b last week, while institutions who own 29% also benefitted.

Let's delve deeper into each type of owner of Línea Directa Aseguradora Compañía de Seguros y Reaseguros, beginning with the chart below.

View our latest analysis for Línea Directa Aseguradora Compañía de Seguros y Reaseguros

What Does The Institutional Ownership Tell Us About Línea Directa Aseguradora Compañía de Seguros y Reaseguros?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Línea Directa Aseguradora Compañía de Seguros y Reaseguros already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Línea Directa Aseguradora Compañía de Seguros y Reaseguros, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Línea Directa Aseguradora Compañía de Seguros y Reaseguros. Cartival S.A. is currently the company's largest shareholder with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 5.3% of the stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Línea Directa Aseguradora Compañía de Seguros y Reaseguros

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Línea Directa Aseguradora, S.A., Compañía de Seguros y Reaseguros insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own €934k worth of shares. The absolute value might be more important than the proportional share. 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 26% stake in Línea Directa Aseguradora Compañía de Seguros y Reaseguros. 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 30%, of the Línea Directa Aseguradora Compañía de Seguros y Reaseguros 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

We can see that public companies hold 14% of the Línea Directa Aseguradora Compañía de Seguros y Reaseguros shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Línea Directa Aseguradora Compañía de Seguros y Reaseguros (1 is potentially serious!) that you should be aware of before investing here.

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.