Cembre S.p.A. (BIT:CMB) surges 4.8%; private companies who own 52% shares profited along with insiders

Key Insights

• The considerable ownership by private companies in Cembre indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Lysne S.P.A. with a 52% stake
• Insiders have been buying lately

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A look at the shareholders of Cembre S.p.A. (BIT:CMB) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Private companies gained the most after market cap touched €1.0b last week, while insiders who own 19% also benefitted.

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

Check out our latest analysis for Cembre

What Does The Institutional Ownership Tell Us About Cembre?

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.

We can see that Cembre does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Cembre, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Cembre. Lysne S.P.A. is currently the company's largest shareholder with 52% of shares outstanding. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 8.7% and 8.6% of the stock. Giovanni Rosani, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Cembre

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.

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 insiders maintain a significant holding in Cembre S.p.A.. It has a market capitalization of just €1.0b, and insiders have €189m worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 17% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 52%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Cembre that you should be aware of.

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.