United Internet AG (ETR:UTDI) insiders have significant skin in the game with 53% ownership

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

Mon, Mar 18, 2024, 1:07 AM 4 min read

To get a sense of who is truly in control of United Internet AG (ETR:UTDI), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

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

Check out our latest analysis for United Internet

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

What Does The Institutional Ownership Tell Us About United Internet?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

United Internet already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 United Internet's earnings history below. Of course, the future is what really matters.

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

Hedge funds don't have many shares in United Internet. Looking at our data, we can see that the largest shareholder is the CEO Ralph Dommermuth with 53% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. The second and third largest shareholders are Wellington Management Group LLP and Flossbach & Von Storch Vermoegensmanagement AG, with an equal amount of shares to their name at 3.3%.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 United Internet

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.

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 most recent data indicates that insiders own the majority of United Internet AG. This means they can collectively make decisions for the company. Given it has a market cap of €3.8b, that means insiders have a whopping €2.0b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over United Internet. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for United Internet that you should be aware of before investing here.

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.