Siemens Limited's (NSE:SIEMENS) last week's 3.8% decline must have disappointed public companies who have a significant stake

Key Insights

• Significant control over Siemens by public companies implies that the general public has more power to influence management and governance-related decisions
• 69% of the company is held by a single shareholder (Siemens Aktiengesellschaft)
• Institutions own 11% of Siemens

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If you want to know who really controls Siemens Limited (NSE:SIEMENS), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 76% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, public companies endured the biggest losses as the stock fell by 3.8%.

In the chart below, we zoom in on the different ownership groups of Siemens.

Check out our latest analysis for Siemens

What Does The Institutional Ownership Tell Us About Siemens?

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.

Siemens already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Siemens' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Siemens. Looking at our data, we can see that the largest shareholder is Siemens Aktiengesellschaft with 69% of shares outstanding. This implies that they have majority interest control of the future of the company. With 6.0% and 1.2% of the shares outstanding respectively, Siemens Energy AG and Life Insurance Corporation of India, Asset Management Arm are the second and third largest shareholders.

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 Siemens

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. 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.

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.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in Siemens. 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.

Public Company Ownership

It appears to us that public companies own 76% of Siemens. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Siemens better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Siemens .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.