State or government are Hera S.p.A.'s (BIT:HER) biggest owners and were rewarded after market cap rose by €190m last week

Key Insights

• Hera's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• 54% of the business is held by the top 8 shareholders
• 21% of Hera is held by Institutions

To get a sense of who is truly in control of Hera S.p.A. (BIT:HER), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are state or government with 34% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, state or government benefitted the most after the company's market cap rose by €190m last week.

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

See our latest analysis for Hera

What Does The Institutional Ownership Tell Us About Hera?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Hera 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. 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 Hera, (below). Of course, keep in mind that there are other factors to consider, too.

Hera is not owned by hedge funds. Comune di Bologna is currently the company's largest shareholder with 13% of shares outstanding. CON.AMI S.p.A. is the second largest shareholder owning 7.6% of common stock, and Comune di Modena holds about 7.1% of the company stock.

We did some more digging and found that 8 of the top shareholders account for roughly 54% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Hera

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

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public-- including retail investors -- own 31% 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 14%, 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Hera (of which 1 is a bit unpleasant!) you should know about.

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.