KSB SE & Co. KGaA (ETR:KSB) share price fell 7.8% last week; private companies would not be happy

If you want to know who actually controls KSB SE & Co. KGaA (ETR:KSB), then you’ll need to look at the composition of its share register. And the group that holds the biggest slice of the pie is made up of 42%-owned private companies. In other words, the group faces the maximum upside potential (or downside risk).

And after the stock price fell 7.8% last week, private companies suffered the most losses.

Let’s dive deeper into each type of KSB SE KGaA owner, starting with the table below.

Check out our latest analysis for KSB SE KGaA

XTRA: KSB Ownership Breakdown June 22, 2022

What does institutional ownership tell us about KSB SE KGaA?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

We see that KSB SE KGaA has many institutional investors; and they own a good part of the shares of the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. It is therefore worth checking the past earnings trajectory of KSB SE KGaA (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
XTRA: KSB profit and revenue growth June 22, 2022

Hedge funds do not have many shares in KSB SE KGaA. Ksb Stiftung is currently the company’s largest shareholder with 42% of the outstanding shares. With respectively 8.0% and 3.8% of the outstanding shares, Union Asset Management Holding AG and Lazard Frères Gestion SAS are the second and third largest shareholders.

After digging a little deeper, we found that the 2 major shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence company decisions.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There is some analyst coverage of the stock, but it could still become better known over time.

Insider ownership of KSB SE KGaA

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our data does not allow us to confirm that the members of the board of directors personally hold shares. It is unusual not to have at least some personal holdings of board members, so our data could be in error. A good next step would be to check how much the CEO gets paid.

General public property

The general public, including retail investors, owns 32% of the company’s shares and therefore cannot be easily ignored. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Private Company Ownership

Private companies appear to hold 42% of the shares of KSB SE KGaA. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this must be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand KSB SE KGaA, we need to consider many other factors. Be aware that KSB SE KGaA displays 1 warning sign in our investment analysis you should know…

If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Karen J. Nelson