Key Insights
-
The considerable ownership by private companies in Knorr-Bremse indicates that they collectively have a greater say in management and business strategy
-
The largest shareholder of the company is Stella VermÖGensverwaltungs- Gmbh with a 59% stake
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. The group holding the most number of shares in the company, around 59% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, institutions make up 24% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
Let’s take a closer look to see what the different types of shareholders can tell us about Knorr-Bremse.
View 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Knorr-Bremse’s earnings history below. Of course, the future is what really matters.
Knorr-Bremse is not owned by hedge funds. Stella VermÖGensverwaltungs- Gmbh is currently the company’s largest shareholder with 59% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 3.0% of the shares outstanding, followed by an ownership of 1.8% 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Knorr-Bremse
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. 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.
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 data cannot confirm that board members are 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
The general public– including retail investors — own 17% stake in the company, and hence can’t easily be ignored. 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
We can see that Private Companies own 59%, of the shares on issue. 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 Knorr-Bremse better, we need to consider many other factors. Be aware that Knorr-Bremse is showing 1 warning sign in our investment analysis , you should know about…
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.