Stock Analysis

Individual investors among Leonardo S.p.a.'s (BIT:LDO) largest shareholders, saw gain in holdings value after stock jumped 5.8% last week

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BIT:LDO
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A look at the shareholders of Leonardo S.p.a. (BIT:LDO) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, individual investors benefitted the most after the company's market cap rose by €240m last week.

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

Our analysis indicates that LDO is potentially undervalued!

ownership-breakdown
BIT:LDO Ownership Breakdown October 21st 2022

What Does The Institutional Ownership Tell Us About Leonardo?

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.

Leonardo 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. 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 Leonardo's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
BIT:LDO Earnings and Revenue Growth October 21st 2022

Hedge funds don't have many shares in Leonardo. Ministero dell'Economia e delle Finanze is currently the company's largest shareholder with 30% of shares outstanding. With 6.2% and 2.5% of the shares outstanding respectively, BlackRock, Inc. and The Vanguard Group, Inc. are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Leonardo

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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. 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 48% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Leonardo better, we need to consider many other factors. For instance, we've identified 3 warning signs for Leonardo that you should be aware of.

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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