Individual investors who have a significant stake must be disappointed along with institutions after Basic-Fit N.V.'s (AMS:BFIT) market cap dropped by €82m
Key Insights
- Significant control over Basic-Fit by individual investors implies that the general public has more power to influence management and governance-related decisions
- 51% of the business is held by the top 11 shareholders
- Insider ownership in Basic-Fit is 12%
A look at the shareholders of Basic-Fit N.V. (AMS:BFIT) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While the holdings of individual investors took a hit after last week’s 4.5% price drop, institutions with their 22% holdings also suffered.
Let's delve deeper into each type of owner of Basic-Fit, beginning with the chart below.
See our latest analysis for Basic-Fit
What Does The Institutional Ownership Tell Us About Basic-Fit?
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 Basic-Fit does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Basic-Fit's historic earnings and revenue below, but keep in mind there's always more to the story.
Our data indicates that hedge funds own 15% of Basic-Fit. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. With a 12% stake, CEO René Moos is the largest shareholder. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 6.7% by the third-largest shareholder.
After doing some more digging, we found that the top 11 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Basic-Fit
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems insiders own a significant proportion of Basic-Fit N.V.. It is very interesting to see that insiders have a meaningful €214m stake in this €1.8b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 43% stake in Basic-Fit. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
With a stake of 6.7%, private equity firms could influence the Basic-Fit board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Basic-Fit better, we need to consider many other factors.
Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.