Great week for Brait PLC (JSE:BAT) insiders who have 39% stake and they haven’t stopped buying

Key Insights

• Insiders appear to have a vested interest in Brait's growth, as seen by their sizeable ownership
• 52% of the business is held by the top 4 shareholders
• Recent purchases by insiders

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Every investor in Brait PLC (JSE:BAT) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 39% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Our data shows that insiders recently bought shares in the company and they were rewarded after market cap rose R850m last week.

Let's delve deeper into each type of owner of Brait, beginning with the chart below.

View our latest analysis for Brait

What Does The Institutional Ownership Tell Us About Brait?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Brait. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Brait'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 Brait. Looking at our data, we can see that the largest shareholder is Christoffel F. Wiese with 39% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.0% and 4.2%, of the shares outstanding, respectively.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Brait

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Brait PLC. Insiders own R3.3b worth of shares in the R8.3b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Brait. 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 Brait better, we need to consider many other factors. For instance, we've identified 2 warning signs for Brait (1 is a bit unpleasant) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.