Stock Analysis

With 88% institutional ownership, Bunge Limited (NYSE:BG) is a favorite amongst the big guns

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NYSE:BG
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Key Insights

  • Given the large stake in the stock by institutions, Bunge's stock price might be vulnerable to their trading decisions
  • A total of 8 investors have a majority stake in the company with 51% ownership
  • Recent sales by insiders

A look at the shareholders of Bunge Limited (NYSE:BG) can tell us which group is most powerful. The group holding the most number of shares in the company, around 88% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

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

See our latest analysis for Bunge

ownership-breakdown
NYSE:BG Ownership Breakdown September 19th 2023

What Does The Institutional Ownership Tell Us About Bunge?

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.

Bunge 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. 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 Bunge's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NYSE:BG Earnings and Revenue Growth September 19th 2023

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Bunge is not owned by hedge funds. Capital Research and Management Company is currently the largest shareholder, with 14% of shares outstanding. With 12% and 9.6% of the shares outstanding respectively, The Vanguard Group, Inc. and BlackRock, Inc. are the second and third largest shareholders.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Bunge

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that Bunge Limited insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$141m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bunge better, we need to consider many other factors. For instance, we've identified 4 warning signs for Bunge (2 don't sit too well with us) that you should be aware of.

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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