Is Natuzzi S.p.A. (NYSE:NTZ) Popular Amongst Insiders?
If you want to know who really controls Natuzzi S.p.A. (NYSE:NTZ), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.
Natuzzi is a smaller company with a market capitalization of US$140m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Natuzzi.
View our latest analysis for Natuzzi
What Does The Institutional Ownership Tell Us About Natuzzi?
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.
We can see that Natuzzi 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 Natuzzi, (below). Of course, keep in mind that there are other factors to consider, too.
Our data indicates that hedge funds own 10.0% of Natuzzi. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Natuzzi's case, its Top Key Executive, Pasquale Natuzzi, is the largest shareholder, holding 62% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10.0% and 4.1%, of the shares outstanding, respectively.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Natuzzi
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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.
It seems that insiders own more than half the Natuzzi S.p.A. stock. This gives them a lot of power. So they have a US$86m stake in this US$140m business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 17% stake in Natuzzi. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Natuzzi that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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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.
