AROBS Transilvania Software S.A.'s (BVB:AROBS) market cap up RON65m last week, benefiting both retail investors who own 51% as well as insiders

Key Insights

• Significant control over AROBS Transilvania Software by retail investors implies that the general public has more power to influence management and governance-related decisions
• 49% of the company is held by a single shareholder (Voicu Oprean)
• Insiders own 49% of AROBS Transilvania Software

A look at the shareholders of AROBS Transilvania Software S.A. (BVB:AROBS) can tell us which group is most powerful. The group holding the most number of shares in the company, around 51% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s RON65m market cap gain, insiders too had a 49% share in those profits.

In the chart below, we zoom in on the different ownership groups of AROBS Transilvania Software.

See our latest analysis for AROBS Transilvania Software

What Does The Lack Of Institutional Ownership Tell Us About AROBS Transilvania Software?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. AROBS Transilvania Software's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in AROBS Transilvania Software. Looking at our data, we can see that the largest shareholder is the CEO Voicu Oprean with 49% of shares outstanding.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 AROBS Transilvania Software

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.

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 most recent data indicates that insiders own a reasonable proportion of AROBS Transilvania Software S.A.. It has a market capitalization of just RON693m, and insiders have RON337m 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 -- including retail investors -- own 51% of AROBS Transilvania Software. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with AROBS Transilvania Software (including 1 which doesn't sit too well with us) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.