Ferrari’s (NYSE:RACE) Management is ‘Owner Oriented’

Ferrari’s (NYSE:RACE) Management is ‘Owner Oriented’


The shareholder make up of Ferrari (NYSE:RACE) tell us a lot about the company and which group is most powerful.

Institutions often own shares in longer established companies, and it is not unusual to see insiders own a fair bit of smaller companies.

Shayne and I like Ferrari because it is a business with long term competitive advantages that is run by able and owner-oriented people, Ferrari’s management is owner-oriented.

With a market cap of $27-B, Ferrari is large, and so we might expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too.

Take a look at the data on the ownership groups, institutions do own shares in the company.

The Big Q: What do the different types of shareholder can tell us about the iconic Italian luxury Supercar maker?.

NYSE:RACE Ownership Summary, May 14th 2019
Ownership Summary: Ferrari as of 14 May 2019

Note: Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they consider buying larger companies that are included in the relevant benchmark index.

Institutional investors own 41% of Ferrari. This indicate that the company has credibility in the investment community. However, if several of those institutions change their view on a stock at the same time, we could see the share price drop fast.

So, let’s look Ferrari’s earnings history, knowing that the future matters most.

NYSE:RACE Income Statement, May 14th 2019
Ferrari’s Income Statement, 14 May 2019

Notes: Hedge funds do not have a meaningful investment in Ferrari.

There are 13 analysts (not including me) covering the stock, so seeing what they are forecasting is Key.

Insider Ownership: While the precise definition of an insider can be subjective, everyone considers board members to be insiders. Management ultimately answers to the board. But, it is not uncommon for managers to be executive board members, especially if they are a Founder or the CEO, insider ownership is seen to be a good thing.

Ferrari insiders own $2.7-B (10%) worth of shares in the $27-B company. That is meaningful.

General Public Ownership: At 48% ownership, the general public have some say about what goes on at Ferrari. Though it cannot call the shots, it can have a real influence on how the company is run.

Now you know who the different groups who own shares in the company. But to understand Ferrari better there are lots of other factors to consider.

Like I said above it is good to know the company’s earnings history, but it is the future that counts, and a Ferrari the future is bright.

Ferrari is the Aristocrat of the automotive sector.

The iconic Italian Supercar manufacturer claimed the title according to the latest Brand Finance Global 500 2019 report launched at the World Economic Forum in Davos.

Ferrari is the Aristocrat of the automotive sector.

HeffX-LTN overall technical outlook for RACE is Very Bullish, there is no resistance above 146.56, and very strong support at 139.83. All of our Key indicators are Very Bullish in here.

Stay tuned…

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