Could The Unidata S.p.A. (BIT:UD) Ownership Structure Tell Us Something Useful?

If you want to know who really controls Unidata S.p.A. (BIT:UD), then you’ll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.

Unidata is not a large company by global standards. It has a market capitalization of €41m, which means it wouldn’t have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don’t own shares in the company. We can zoom in on the different ownership groups, to learn more about Unidata.

Check out our latest analysis for Unidata

BIT:UD Ownership Summary June 17th 2020
BIT:UD Ownership Summary June 17th 2020

What Does The Lack Of Institutional Ownership Tell Us About Unidata?

We don’t tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it’s not particularly common.

There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Unidata might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

BIT:UD Income Statement June 17th 2020
BIT:UD Income Statement June 17th 2020

Hedge funds don’t have many shares in Unidata. Uninvest S.R.L. is currently the largest shareholder, with 70% of shares outstanding. This implies that they have majority interest control of the future of the company. The second and third largest shareholders are Renato Brunetti and Marcello Vispi, each holding around 2.5% of the shares outstanding. Note that they are also Chief Executive Officer and Vice Chairman, respectively, meaning that the company’s top shareholders are insiders.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Unidata

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 information suggests that insiders maintain a significant holding in Unidata S.p.A.. It has a market capitalization of just €41m, and insiders have €5.1m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public holds a 18% stake in UD. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 70%, of the shares on issue. 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 Unidata better, we need to consider many other factors. Be aware that Unidata is showing 1 warning sign in our investment analysis , you should know about…

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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