Do Insiders Own Lots Of Shares In Nilörngruppen AB (STO:NIL B)?

By
Simply Wall St
Published
June 06, 2021
OM:NIL B
Source: Shutterstock

The big shareholder groups in Nilörngruppen AB (STO:NIL B) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.

With a market capitalization of kr857m, Nilörngruppen is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Nilörngruppen.

Check out our latest analysis for Nilörngruppen

ownership-breakdown
OM:NIL B Ownership Breakdown June 7th 2021

What Does The Institutional Ownership Tell Us About Nilörngruppen?

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.

We can see that Nilörngruppen does have institutional investors; and they hold a good portion of the company's stock. 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 Nilörngruppen's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
OM:NIL B Earnings and Revenue Growth June 7th 2021

Hedge funds don't have many shares in Nilörngruppen. The company's largest shareholder is AB Traction, with ownership of 24%. Nordnet AB (publ), Asset Management Arm is the second largest shareholder owning 5.6% of common stock, and Avanza Fonder AB holds about 4.9% of the company stock. Additionally, the company's CEO Krister Magnusson directly holds 0.7% of the total shares outstanding.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Nilörngruppen

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Nilörngruppen AB. As individuals, the insiders collectively own kr43m worth of the kr857m company. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 28% stake in Nilörngruppen. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

Private equity firms hold a 24% stake in Nilörngruppen. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with Nilörngruppen .

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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