Digital Bros S.p.A.'s (BIT:DIB) Co-Chief Executive Officer Raffaele Galante is the most upbeat insider, and their holdings increased by 11% last week

Key Insights

• Digital Bros' significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 69% ownership
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Digital Bros S.p.A. (BIT:DIB) should be aware of the most powerful shareholder groups. With 69% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit €129m market cap following a 11% gain in the stock.

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

Check out our latest analysis for Digital Bros

What Does The Institutional Ownership Tell Us About Digital Bros?

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.

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

Digital Bros is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Digital Bros' case, its Co-Chief Executive Officer, Raffaele Galante, is the largest shareholder, holding 35% of shares outstanding. In comparison, the second and third largest shareholders hold about 35% and 2.4% of the stock. Interestingly, the second-largest shareholder, Abramo Galante is also Co-Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Digital Bros

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.

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.

Our most recent data indicates that insiders own the majority of Digital Bros S.p.A.. This means they can collectively make decisions for the company. That means they own €89m worth of shares in the €129m company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Digital Bros. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Digital Bros better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Digital Bros , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.