Stock Analysis

Private equity firms account for 36% of Bureau Veritas SA's (EPA:BVI) ownership, while institutions account for 33%

  •  Updated
ENXTPA:BVI
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If you want to know who really controls Bureau Veritas SA (EPA:BVI), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private equity firms with 36% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And institutions on the other hand have a 33% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

Let's delve deeper into each type of owner of Bureau Veritas, beginning with the chart below.

However if you'd rather see where the opportunities and risks are within BVI's industry, you can check out our analysis on the FR Professional Services industry.

ownership-breakdown
ENXTPA:BVI Ownership Breakdown October 1st 2022

What Does The Institutional Ownership Tell Us About Bureau Veritas?

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.

As you can see, institutional investors have a fair amount of stake in Bureau Veritas. 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. 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 Bureau Veritas' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
ENXTPA:BVI Earnings and Revenue Growth October 1st 2022

We note that hedge funds don't have a meaningful investment in Bureau Veritas. Wendel is currently the company's largest shareholder with 36% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.0% and 2.4%, of the shares outstanding, respectively.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Bureau Veritas

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our most recent data indicates that insiders own less than 1% of Bureau Veritas SA. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own €13m worth of shares (at current prices). 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

The general public, who are usually individual investors, hold a 31% stake in Bureau Veritas. 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.

Private Equity Ownership

With a stake of 36%, private equity firms could influence the Bureau Veritas board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bureau Veritas better, we need to consider many other factors. Be aware that Bureau Veritas is showing 2 warning signs in our investment analysis , you should know about...

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.

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

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About ENXTPA:BVI

Bureau Veritas

Bureau Veritas SA provides laboratory testing, inspection, and certification services.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation2
Future Growth2
Past Performance4
Financial Health5
Dividends4

Read more about these checks in the individual report sections or in our analysis model.

Excellent balance sheet with proven track record and pays a dividend.