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A look at the shareholders of Bodegas Riojanas, S.A. (BME:RIO) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of 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.'
Bodegas Riojanas is a smaller company with a market capitalization of €22m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about RIO.
See our latest analysis for Bodegas Riojanas
What Does The Institutional Ownership Tell Us About Bodegas Riojanas?
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.
As you can see, institutional investors own 13% of Bodegas Riojanas. 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 Bodegas Riojanas's historic earnings and revenue, below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Bodegas Riojanas. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Bodegas Riojanas
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
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.