Private companies invested in Norcod AS (OB:NCOD) copped the brunt of last week's kr241m market cap decline

Key Insights

• The considerable ownership by private companies in Norcod indicates that they collectively have a greater say in management and business strategy
• 56% of the business is held by the top 3 shareholders
• Insider ownership in Norcod is 25%

Every investor in Norcod AS (OB:NCOD) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 18% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 25% stock also took a hit.

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

View our latest analysis for Norcod

What Does The Institutional Ownership Tell Us About Norcod?

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.

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

Norcod is not owned by hedge funds. Our data shows that Artha Norcod IV A/S is the largest shareholder with 27% of shares outstanding. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 13% by the third-largest shareholder.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Norcod

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.

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.

Our information suggests that insiders maintain a significant holding in Norcod AS. Insiders own kr272m worth of shares in the kr1.1b company. 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, who are usually individual investors, hold a 12% stake in Norcod. 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 52%, of the company's shares. 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 Norcod better, we need to consider many other factors. Take risks for example - Norcod has 3 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com