February 22, 2024
Finance

BSP Financial Group Limited (ASX:BFL) has caught the attention of institutional investors who hold a sizeable 49% stake


Key Insights

  • Significantly high institutional ownership implies BSP Financial Group’s stock price is sensitive to their trading actions

  • 58% of the business is held by the top 5 shareholders

  • Using data from company’s past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls BSP Financial Group Limited (ASX:BFL), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 49% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with 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 BSP Financial Group, beginning with the chart below.

Check out our latest analysis for BSP Financial Group

ownership-breakdown

ASX:BFL Ownership Breakdown December 21st 2023

What Does The Institutional Ownership Tell Us About BSP Financial Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

BSP Financial Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 BSP Financial Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth

ASX:BFL Earnings and Revenue Growth December 21st 2023

BSP Financial Group is not owned by hedge funds. Our data shows that Independent Public Business Corporation of PNG is the largest shareholder with 18% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 9.9%, of the shares outstanding, respectively.

Our research also brought to light the fact that roughly 58% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. As far as we can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of BSP Financial Group

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.

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.

Our most recent data indicates that insiders own less than 1% of BSP Financial Group Limited. However, it’s possible that insiders might have an indirect interest through a more complex structure. Keep in mind that it’s a big company, and the insiders own AU$516k worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over BSP Financial Group. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 17%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. Take risks for example – BSP Financial Group has 1 warning sign we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.



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