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Do Insiders Own Lots Of Shares In Beazer Homes USA, Inc. (NYSE:BZH)?
The big shareholder groups in Beazer Homes USA, Inc. (NYSE:BZH) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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.
Beazer Homes USA is a smaller company with a market capitalization of US$581m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Beazer Homes USA.
View our latest analysis for Beazer Homes USA
What Does The Institutional Ownership Tell Us About Beazer Homes USA?
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.
As you can see, institutional investors have a fair amount of stake in Beazer Homes USA. 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 Beazer Homes USA's earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Beazer Homes USA is not owned by hedge funds. Our data shows that BlackRock, Inc. is the largest shareholder with 9.3% of shares outstanding. Capital Research and Management Company is the second largest shareholder owning 5.5% of common stock, and Donald Smith & Co., Inc. holds about 5.3% of the company stock. Furthermore, CEO Allan Merrill is the owner of 2.7% of the company's shares.
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 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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Beazer Homes USA
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.
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.
Shareholders would probably be interested to learn that insiders own shares in Beazer Homes USA, Inc.. As individuals, the insiders collectively own US$33m worth of the US$581m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 13% ownership, the general public have some degree of sway over Beazer Homes USA. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Beazer Homes USA better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Beazer Homes USA , and understanding them should be part of your investment process.
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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About NYSE:BZH
Very undervalued with mediocre balance sheet.