Could The Begbies Traynor Group plc (LON:BEG) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
May 23, 2021
AIM:BEG
Source: Shutterstock

If you want to know who really controls Begbies Traynor Group plc (LON:BEG), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Begbies Traynor Group is a smaller company with a market capitalization of UK£206m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Begbies Traynor Group.

Check out our latest analysis for Begbies Traynor Group

ownership-breakdown
AIM:BEG Ownership Breakdown May 24th 2021

What Does The Institutional Ownership Tell Us About Begbies Traynor Group?

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.

We can see that Begbies Traynor Group does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Begbies Traynor Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
AIM:BEG Earnings and Revenue Growth May 24th 2021

Hedge funds don't have many shares in Begbies Traynor Group. Begbies Traynor National Partnership is currently the largest shareholder, with 12% of shares outstanding. Richard Traynor is the second largest shareholder owning 6.0% of common stock, and Close Asset Management Limited holds about 5.8% of the company stock. Richard Traynor, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Begbies Traynor Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Shareholders would probably be interested to learn that insiders own shares in Begbies Traynor Group plc. It has a market capitalization of just UK£206m, and insiders have UK£15m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 30% ownership, the general public have some degree of sway over Begbies Traynor Group. 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 Company Ownership

Our data indicates that Private Companies hold 13%, of the company's shares. 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. To that end, you should be aware of the 2 warning signs we've spotted with Begbies Traynor Group .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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