Banco BPM S.p.A. (BIT:BAMI) surges 12%; individual investors who own 58% shares profited along with institutions

Key Insights

• Significant control over Banco BPM by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 40% ownership
• Institutions own 39% of Banco BPM

Every investor in Banco BPM S.p.A. (BIT:BAMI) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 12% increase in the stock price last week, individual investors profited the most, but institutions who own 39% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Banco BPM.

View our latest analysis for Banco BPM

What Does The Institutional Ownership Tell Us About Banco BPM?

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.

As you can see, institutional investors have a fair amount of stake in Banco BPM. 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 Banco BPM, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Banco BPM. Our data shows that Amundi Asset Management SAS is the largest shareholder with 9.2% of shares outstanding. With 5.2% and 5.0% of the shares outstanding respectively, JPMorgan Chase & Co, Brokerage and Securities Investments and Capital Research and Management Company are the second and third largest shareholders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Banco BPM

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public -- including retail investors -- own 58% of Banco BPM. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

Our data indicates that Private Companies hold 3.0%, of the company's shares. 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 Banco BPM better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Banco BPM (of which 1 can't be ignored!) you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.