Private companies who hold 59% of Knorr-Bremse AG (ETR:KBX) gained 5.2%, institutions profited as well
In This Article:
Key Insights
-
Significant control over Knorr-Bremse by private companies implies that the general public has more power to influence management and governance-related decisions
-
The largest shareholder of the company is Stella Verm?Gensverwaltungs- Gmbh with a 59% stake
-
22% of Knorr-Bremse is held by Institutions
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. And the group that holds the biggest piece of the pie are private companies with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Following a 5.2% increase in the stock price last week, private companies profited the most, but institutions who own 22% stock also stood to gain from the increase.
In the chart below, we zoom in on the different ownership groups of Knorr-Bremse.
Check out 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. 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 Knorr-Bremse's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Knorr-Bremse. The company's largest shareholder is Stella Verm?Gensverwaltungs- Gmbh, with ownership of 59%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 3.0% of the shares outstanding, followed by an ownership of 1.6% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.