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Could The Cofinimmo SA (EBR:COFB) Ownership Structure Tell Us Something Useful?

Simply Wall St

The big shareholder groups in Cofinimmo SA (EBR:COFB) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.

With a market capitalization of €3.4b, Cofinimmo is rather large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. In the chart below below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about COFB.

See our latest analysis for Cofinimmo

ENXTBR:COFB Ownership Summary, October 16th 2019

What Does The Institutional Ownership Tell Us About Cofinimmo?

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.

Cofinimmo already has institutions on the share registry. Indeed, they own 28% of 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 Cofinimmo's earnings history, below. Of course, the future is what really matters.

ENXTBR:COFB Income Statement, October 16th 2019

We note that hedge funds don't have a meaningful investment in Cofinimmo. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Cofinimmo

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 less than 1% of Cofinimmo SA. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own €562k worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are mostly retail investors, collectively hold 75% of Cofinimmo shares. This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

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 like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.