Betterware de México, S.A.P.I. de C.V.'s (NASDAQ:BWMX) market cap surged US$74m last week, private companies who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by private companies in Betterware de MéxicoP.I. de indicates that they collectively have a greater say in management and business strategy
• Campalier, S.A. de C.V. owns 54% of the company
• Institutional ownership in Betterware de MéxicoP.I. de is 13%

To get a sense of who is truly in control of Betterware de México, S.A.P.I. de C.V. (NASDAQ:BWMX), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private companies benefitted the most after the company's market cap rose by US$74m last week.

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

View our latest analysis for Betterware de MéxicoP.I. de

What Does The Institutional Ownership Tell Us About Betterware de MéxicoP.I. de?

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 Betterware de MéxicoP.I. de does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Betterware de MéxicoP.I. de'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 Betterware de MéxicoP.I. de. Our data shows that Campalier, S.A. de C.V. is the largest shareholder with 54% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 11% and 0.3%, of the shares outstanding, respectively.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Betterware de MéxicoP.I. de

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Betterware de MéxicoP.I. de. 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.

Private Company Ownership

We can see that Private Companies own 54%, 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Betterware de MéxicoP.I. de (of which 1 is potentially serious!) you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.