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Every investor in Cairo Communication S.p.A. (BIT:CAI) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.'
Cairo Communication is a smaller company with a market capitalization of €325m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about CAI.
Check out our latest analysis for Cairo Communication
What Does The Institutional Ownership Tell Us About Cairo Communication?
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 Cairo Communication does have institutional investors; and they hold 15% of the stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Cairo Communication's historic earnings and revenue, below, but keep in mind there's always more to the story.
Cairo Communication is not owned by hedge funds. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Cairo Communication
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Shareholders would probably be interested to learn that insiders own shares in Cairo Communication S.p.A.. As individuals, the insiders collectively own €19m worth of the €325m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.