Yahoo Finance Famous Brands Limited (JSE:FBR) has caught the attention of institutional investors who hold a sizeable 36% stake
Key Insights
Significantly high institutional ownership implies Famous Brands' stock price is sensitive to their trading actions
A total of 5 investors have a majority stake in the company with 54% ownership
To get a sense of who is truly in control of Famous Brands Limited (JSE:FBR), it is important to understand the ownership structure of the business. With 36% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's delve deeper into each type of owner of Famous Brands, beginning with the chart below.
View our latest analysis for Famous Brands
What Does The Institutional Ownership Tell Us About Famous Brands?
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.
Famous Brands already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Famous Brands, (below). Of course, keep in mind that there are other factors to consider, too.
It looks like hedge funds own 8.4% of Famous Brands shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Coronation Fund Managers Limited is currently the company's largest shareholder with 22% of shares outstanding. Public Investment Corporation Limited is the second largest shareholder owning 11% of common stock, and Visio Capital Management (Pty) Ltd. holds about 8.4% of the company stock.
Our research also brought to light the fact that roughly 54% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Famous Brands
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
Our information suggests that insiders maintain a significant holding in Famous Brands Limited. It has a market capitalization of just R5.8b, and insiders have R601m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 34% stake in Famous Brands. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
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. Be aware that Famous Brands is showing 2 warning signs in our investment analysis , you should know about...
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.
