Kudelski SA's (VTX:KUD) 44% gain last week benefited both retail investors who own 57% as well as insiders

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editorial-team@simplywallst.com (Simply Wall St)

Mon, Feb 19, 2024, 9:12 PM 4 min read

Key Insights

The considerable ownership by retail investors in Kudelski indicates that they collectively have a greater say in management and business strategy
43% of the business is held by the top 25 shareholders
37% of Kudelski is held by insiders

To get a sense of who is truly in control of Kudelski SA (VTX:KUD), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 44% price gain, insiders also received a 37% cut.

In the chart below, we zoom in on the different ownership groups of Kudelski.

Check out our latest analysis for Kudelski

ownership-breakdown — SWX:KUD Ownership Breakdown February 20th 2024

What Does The Institutional Ownership Tell Us About Kudelski?

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.

We can see that Kudelski does have institutional investors; and they hold a good portion of the company's 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. 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 Kudelski's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — SWX:KUD Earnings and Revenue Growth February 20th 2024

We note that hedge funds don't have a meaningful investment in Kudelski. With a 35% stake, CEO André Kudelski is the largest shareholder. In comparison, the second and third largest shareholders hold about 1.8% and 1.1% of the stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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.

Insider Ownership Of Kudelski

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.

Our information suggests that insiders maintain a significant holding in Kudelski SA. Insiders have a CHF38m stake in this CHF101m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 57% stake in Kudelski, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

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 instance, we've identified 2 warning signs for Kudelski (1 doesn't sit too well with us) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.