Could The BFF Bank S.p.A. (BIT:BFF) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
February 23, 2022
BIT:BFF
Source: Shutterstock

If you want to know who really controls BFF Bank S.p.A. (BIT:BFF), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. 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.

With a market capitalization of €1.3b, BFF Bank is a decent size, so it is probably on the radar of institutional investors. In the chart below, we can see that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about BFF Bank.

Check out our latest analysis for BFF Bank

ownership-breakdown
BIT:BFF Ownership Breakdown February 23rd 2022

What Does The Institutional Ownership Tell Us About BFF Bank?

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.

BFF Bank 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 BFF Bank, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
BIT:BFF Earnings and Revenue Growth February 23rd 2022

We note that hedge funds don't have a meaningful investment in BFF Bank. Looking at our data, we can see that the largest shareholder is Equinova UK Holdco Limited with 7.6% of shares outstanding. With 7.3% and 5.0% of the shares outstanding respectively, Centerbridge Partners, L.P. and Massimiliano Belingheri are the second and third largest shareholders. Massimiliano Belingheri, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A closer look at our ownership figures suggests that the top 19 shareholders have a combined ownership of 50% 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 BFF Bank

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.

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.

We can see that insiders own shares in BFF Bank S.p.A.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around €69m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over BFF Bank. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 7.3%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.

Private Company Ownership

It seems that Private Companies own 8.6%, of the BFF Bank stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand BFF Bank better, we need to consider many other factors. Take risks for example - BFF Bank has 4 warning signs (and 1 which is potentially serious) we think you should know about.

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.

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