Ringmetall SE (ETR:HP3A) insiders have significant skin in the game with 36% ownership

Simply Wall St

Wed, Jun 28, 2023, 12:35 AM 4 min read

Key Insights

Ringmetall's significant insider ownership suggests inherent interests in company's expansion
The top 2 shareholders own 53% of the company
13% of Ringmetall is held by Institutions

Every investor in Ringmetall SE (ETR:HP3A) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 36% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So, insiders of Ringmetall have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

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

Check out our latest analysis for Ringmetall

ownership-breakdown — XTRA:HP3A Ownership Breakdown June 28th 2023

What Does The Institutional Ownership Tell Us About Ringmetall?

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.

We can see that Ringmetall 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. 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 Ringmetall, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — XTRA:HP3A Earnings and Revenue Growth June 28th 2023

Ringmetall is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Christoph Petri with 36% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 6.2% of the stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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

Insider Ownership Of Ringmetall

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own a reasonable proportion of Ringmetall SE. Insiders own €34m worth of shares in the €94m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Ringmetall. 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

It seems that Private Companies own 23%, of the Ringmetall stock. 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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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