Commerzbank AG (ETR:CBK) surges 6.3%; individual investors who own 51% shares profited along with institutions

editorial-team@simplywallst.com (Simply Wall St)

Mon, Mar 18, 2024, 1:17 AM 4 min read

If you want to know who really controls Commerzbank AG (ETR:CBK), 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 investors with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.3% increase in the stock price last week, individual investors profited the most, but institutions who own 33% stock also stood to gain from the increase.

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

View our latest analysis for Commerzbank

ownership-breakdown — XTRA:CBK Ownership Breakdown March 18th 2024

What Does The Institutional Ownership Tell Us About Commerzbank?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Commerzbank already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Commerzbank, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — XTRA:CBK Earnings and Revenue Growth March 18th 2024

Commerzbank is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Financial Market Stabilisation Fund SoFFin with 16% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.1% and 3.4%, of the shares outstanding, respectively.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Commerzbank

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 51% of Commerzbank shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Commerzbank better, we need to consider many other factors. Take risks for example - Commerzbank has 1 warning sign we think you should be aware of.

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.