Key Insights
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Significant control over Knorr-Bremse by private companies implies that the general public has more power to influence management and governance-related decisions
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The largest shareholder of the company is Stella VermÖGensverwaltungs- Gmbh with a 59% stake
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22% of Knorr-Bremse is held by Institutions
To get a sense of who is truly in control of Knorr-Bremse AG (ETR:KBX), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Following a 5.2% increase in the stock price last week, private companies profited the most, but institutions who own 22% stock also stood to gain from the increase.
In the chart below, we zoom in on the different ownership groups of Knorr-Bremse.
Check out our latest analysis for Knorr-Bremse
What Does The Institutional Ownership Tell Us About Knorr-Bremse?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Knorr-Bremse. 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. 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 Knorr-Bremse’s historic earnings and revenue below, but keep in mind there’s always more to the story.
We note that hedge funds don’t have a meaningful investment in Knorr-Bremse. The company’s largest shareholder is Stella VermÖGensverwaltungs- Gmbh, with ownership of 59%. 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 3.0% of the shares outstanding, followed by an ownership of 1.6% by the third-largest shareholder.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Knorr-Bremse
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.
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.
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
With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Knorr-Bremse. 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 Company Ownership
Our data indicates that Private Companies hold 59%, of the company’s shares. 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. To that end, you should be aware of the 1 warning sign we’ve spotted with Knorr-Bremse .
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.