Better Collective A/S’ (STO:BETCO) biggest owners are private equity firms who got richer after stock soared 9.0% last week

Better Collective A/S’ (STO:BETCO) biggest owners are private equity firms who got richer after stock soared 9.0% last week

If you want to know who really controls Better Collective A/S (STO:BETCO), then you’ll have to look at the makeup of its share registry. With 39% stake, private equity firms possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private equity firms benefitted the most after the company’s market cap rose by kr682m last week.

Let’s take a closer look to see what the different types of shareholders can tell us about Better Collective.

Before we look at the ownership breakdown, you might like to know that our analysis indicates that BETCO is potentially undervalued!

ownership-breakdown
OM:BETCO Ownership Breakdown September 14th 2022

What Does The Institutional Ownership Tell Us About Better Collective?

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.

As you can see, institutional investors have a fair amount of stake in Better Collective. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Better Collective’s earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
OM:BETCO Earnings and Revenue Growth September 14th 2022

We note that hedge funds don’t have a meaningful investment in Better Collective. Looking at our data, we can see that the largest shareholder is Dreamcraft Ventures Management ApS with 39% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.6% and 4.5% of the stock.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Better Collective

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.

We can report that insiders do own shares in Better Collective A/S. In their own names, insiders own kr491m worth of stock in the kr8.3b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Better Collective. 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 Equity Ownership

With a stake of 39%, private equity firms could influence the Better Collective 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.

Private Company Ownership

It seems that Private Companies own 6.9%, of the Better Collective stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Better Collective is showing 2 warning signs in our investment analysis , and 1 of those doesn’t sit too well with us…

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.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Better Collective is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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