Stock Analysis

Brunello Cucinelli S.p.A.'s (BIT:BC) market cap dropped €248m last week; individual investors who hold 50% were hit as were institutions

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BIT:BC
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To get a sense of who is truly in control of Brunello Cucinelli S.p.A. (BIT:BC), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 7.0% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 32% stock also took a hit.

Let's delve deeper into each type of owner of Brunello Cucinelli, beginning with the chart below.

If you're not interested in researching BC's ownership structure, we have a free list of interesting investing ideas to potentially inspire your next investment!

ownership-breakdown
BIT:BC Ownership Breakdown September 28th 2022

What Does The Institutional Ownership Tell Us About Brunello Cucinelli?

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.

Brunello Cucinelli already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Brunello Cucinelli's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
BIT:BC Earnings and Revenue Growth September 28th 2022

We note that hedge funds don't have a meaningful investment in Brunello Cucinelli. The company's largest shareholder is Fedone S.R.L., with ownership of 50%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 9.5% and 4.2% of the shares outstanding respectively, FMR LLC and Invesco Ltd. are the second and third largest shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Brunello Cucinelli

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

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 18% stake in Brunello Cucinelli. 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

Our data indicates that Private Companies hold 50%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Brunello Cucinelli is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About BIT:BC

Brunello Cucinelli

Brunello Cucinelli S.p.A., together with its subsidiaries, engages in the production and sale of clothing, accessories, and lifestyle products in Italy, Europe, North America, Japan, and China.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation0
Future Growth4
Past Performance5
Financial Health4
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Solid track record with reasonable growth potential.