In the wake of Hofseth BioCare ASA's (OB:HBC) latest kr126m market cap drop, institutional owners may be forced to take severe actions
If you want to know who really controls Hofseth BioCare ASA (OB:HBC), 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 institutions with 25% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, institutional investors endured the highest losses last week after market cap fell by kr126m. The recent loss, which adds to a one-year loss of 55% for stockholders, may not sit well with this group of investors. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the downtrend continues, institutions may face pressures to sell Hofseth BioCare, which might have negative implications on individual investors.
In the chart below, we zoom in on the different ownership groups of Hofseth BioCare.
See our latest analysis for Hofseth BioCare
What Does The Institutional Ownership Tell Us About Hofseth BioCare?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Hofseth BioCare does have institutional investors; and they hold a good portion of the company's stock. 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 Hofseth BioCare's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Hofseth BioCare. Our data shows that Roger Hofseth is the largest shareholder with 18% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 15% and 10%, of the shares outstanding, respectively.
On looking further, we found that 54% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Hofseth BioCare
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. 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.
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.
It seems insiders own a significant proportion of Hofseth BioCare ASA. It has a market capitalization of just kr1.1b, and insiders have kr240m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hofseth BioCare. 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 a stake of 5.7%, private equity firms could influence the Hofseth BioCare 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
We can see that Private Companies own 16%, 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.
Public Company Ownership
It appears to us that public companies own 10% of Hofseth BioCare. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
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. Case in point: We've spotted 4 warning signs for Hofseth BioCare you should be aware of, and 2 of them are concerning.
Of course this may not be the best stock to buy. So take a peek at this free 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.
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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.
Hofseth BioCare ASA operates as a consumer and pet health ingredient supplier in Norway and internationally.
Mediocre balance sheet and slightly overvalued.