Institutional investors are Bure Equity AB (publ)'s (STO:BURE) biggest bettors and were rewarded after last week's kr845m market cap gain

Key Insights

• Given the large stake in the stock by institutions, Bure Equity's stock price might be vulnerable to their trading decisions
• A total of 8 investors have a majority stake in the company with 53% ownership
• Recent purchases by insiders

To get a sense of who is truly in control of Bure Equity AB (publ) (STO:BURE), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 39% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Last week’s 3.3% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 57% and last week’s gain was the icing on the cake.

Let's take a closer look to see what the different types of shareholders can tell us about Bure Equity.

See our latest analysis for Bure Equity

What Does The Institutional Ownership Tell Us About Bure Equity?

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.

Bure Equity 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Bure Equity's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Bure Equity. Looking at our data, we can see that the largest shareholder is Patrik Tigerschiold with 10% of shares outstanding. With 9.9% and 7.8% of the shares outstanding respectively, AMF Fonder AB and Fourth Swedish National Pension Fund (AP4) are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Bure Equity

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Bure Equity AB (publ). It has a market capitalization of just kr27b, and insiders have kr6.6b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 36% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bure Equity better, we need to consider many other factors. For example, we've discovered 2 warning signs for Bure Equity that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com