Do Insiders Own Lots Of Shares In Kanzhun Limited (NASDAQ:BZ)?

By
Simply Wall St
Published
January 23, 2022
NasdaqGS:BZ
Source: Shutterstock

A look at the shareholders of Kanzhun Limited (NASDAQ:BZ) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of 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.

Kanzhun is a pretty big company. It has a market capitalization of US$11b. Normally institutions would own a significant portion of a company this size. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Kanzhun.

Check out our latest analysis for Kanzhun

ownership-breakdown
NasdaqGS:BZ Ownership Breakdown January 23rd 2022

What Does The Institutional Ownership Tell Us About Kanzhun?

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.

As you can see, institutional investors have a fair amount of stake in Kanzhun. 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 Kanzhun's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:BZ Earnings and Revenue Growth January 23rd 2022

It looks like hedge funds own 11% of Kanzhun shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company's CEO Peng Zhao is the largest shareholder with 18% of shares outstanding. With 11% and 10% of the shares outstanding respectively, Coatue Management, L.L.C. and Capital Today are the second and third largest shareholders.

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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Kanzhun

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 Kanzhun Limited. Insiders own US$2.0b worth of shares in the US$11b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kanzhun. 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 23%, private equity firms could influence the Kanzhun board. 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.

Public Company Ownership

It appears to us that public companies own 8.6% of Kanzhun. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kanzhun better, we need to consider many other factors. Take risks for example - Kanzhun has 1 warning sign we think you should be aware of.

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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