Are Institutions Heavily Invested In Brightcove Inc.'s (NASDAQ:BCOV) Shares?

By
Simply Wall St
Published
February 18, 2022
NasdaqGS:BCOV
Source: Shutterstock

If you want to know who really controls Brightcove Inc. (NASDAQ:BCOV), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.

Brightcove is a smaller company with a market capitalization of US$320m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Brightcove.

See our latest analysis for Brightcove

ownership-breakdown
NasdaqGS:BCOV Ownership Breakdown February 18th 2022

What Does The Institutional Ownership Tell Us About Brightcove?

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

earnings-and-revenue-growth
NasdaqGS:BCOV Earnings and Revenue Growth February 18th 2022

It looks like hedge funds own 39% of Brightcove shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Trigran Investments, Inc. is currently the largest shareholder, with 13% of shares outstanding. With 11% and 8.0% of the shares outstanding respectively, Edenbrook Capital Partners, LLC and Tenzing Global Management LLC 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 6 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Brightcove

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Brightcove Inc.. As individuals, the insiders collectively own US$4.2m worth of the US$320m 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 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Brightcove. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Brightcove 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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