Owning 45% in Carlo Gavazzi Holding AG (VTX:GAV) means that insiders are heavily invested in the company's future

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

Sat, Nov 18, 2023, 11:13 PM 4 min read

Key Insights

Carlo Gavazzi Holding's significant insider ownership suggests inherent interests in company's expansion
A total of 4 investors have a majority stake in the company with 50% ownership
Institutional ownership in Carlo Gavazzi Holding is 12%

Every investor in Carlo Gavazzi Holding AG (VTX:GAV) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 45% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of Carlo Gavazzi Holding regarding the company's future would be crucial to them.

Let's take a closer look to see what the different types of shareholders can tell us about Carlo Gavazzi Holding.

Check out our latest analysis for Carlo Gavazzi Holding

ownership-breakdown — SWX:GAV Ownership Breakdown November 19th 2023

What Does The Institutional Ownership Tell Us About Carlo Gavazzi Holding?

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.

Carlo Gavazzi Holding already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Carlo Gavazzi Holding's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth — SWX:GAV Earnings and Revenue Growth November 19th 2023

Hedge funds don't have many shares in Carlo Gavazzi Holding. Valeria Gavazzi is currently the largest shareholder, with 41% of shares outstanding. The second and third largest shareholders are UBS Asset Management AG and Stefano Trovati, with an equal amount of shares to their name at 3.3%. Stefano Trovati, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Carlo Gavazzi Holding

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Carlo Gavazzi Holding AG. Insiders have a CHF103m stake in this CHF229m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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. For example, we've discovered 2 warning signs for Carlo Gavazzi Holding (1 is significant!) that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.