Insiders are the top stockholders in XTB S.A. (WSE:XTB), and the recent 18% drop might have disappointed them

Key Insights

• Insiders appear to have a vested interest in XTB's growth, as seen by their sizeable ownership
• 51% of the company is held by a single shareholder (Jakub Zablocki)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls XTB S.A. (WSE:XTB), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 18% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of XTB.

View our latest analysis for XTB

What Does The Institutional Ownership Tell Us About XTB?

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.

As you can see, institutional investors have a fair amount of stake in XTB. 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 XTB's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in XTB. Looking at our data, we can see that the largest shareholder is Jakub Zablocki with 51% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 1.4% of the shares outstanding, followed by an ownership of 1.0% by the third-largest shareholder.

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 XTB

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders own more than half of XTB S.A.. This gives them effective control of the company. Given it has a market cap of zł7.0b, that means insiders have a whopping zł3.6b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over XTB. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with XTB , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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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