While individual investors own 27% of RATIONAL Aktiengesellschaft (ETR:RAA), private companies are its largest shareholders with 32% ownership

Key Insights

• The considerable ownership by private companies in RATIONAL indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 52% of the company
• Insiders own 16% of RATIONAL

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To get a sense of who is truly in control of RATIONAL Aktiengesellschaft (ETR:RAA), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 32% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And individual investors on the other hand have a 27% ownership in the company.

Let's delve deeper into each type of owner of RATIONAL, beginning with the chart below.

See our latest analysis for RATIONAL

What Does The Institutional Ownership Tell Us About RATIONAL?

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 RATIONAL does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 RATIONAL's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in RATIONAL. The company's largest shareholder is Estate Of Siegfried Meister, with ownership of 32%. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 4.4% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of RATIONAL

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of RATIONAL Aktiengesellschaft. It is very interesting to see that insiders have a meaningful €1.2b stake in this €7.5b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over RATIONAL. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 32%, of the RATIONAL stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand RATIONAL better, we need to consider many other factors. For example, we've discovered 1 warning sign for RATIONAL that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.