Institutions profited after Baby Bunting Group Limited's (ASX:BBN) market cap rose AU$25m last week but individual investors profited the most

Simply Wall St · 10/18 02:07

Key Insights

  • The considerable ownership by individual investors in Baby Bunting Group indicates that they collectively have a greater say in management and business strategy
  • A total of 8 investors have a majority stake in the company with 50% ownership
  • Insiders have been buying lately

If you want to know who really controls Baby Bunting Group Limited (ASX:BBN), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched AU$259m last week, while institutions who own 39% also benefitted.

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

Check out our latest analysis for Baby Bunting Group

ownership-breakdown
ASX:BBN Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About Baby Bunting Group?

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 Baby Bunting Group does have institutional investors; and they hold a good portion of the company's stock. 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 Baby Bunting Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
ASX:BBN Earnings and Revenue Growth October 18th 2024

We note that hedge funds don't have a meaningful investment in Baby Bunting Group. HMC Capital Limited is currently the company's largest shareholder with 15% of shares outstanding. Australian Super Pty Ltd is the second largest shareholder owning 13% of common stock, and Yarra Funds Management Limited holds about 6.1% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 8 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Baby Bunting Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Baby Bunting Group Limited. In their own names, insiders own AU$5.2m worth of stock in the AU$259m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Baby Bunting Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

It appears to us that public companies own 15% of Baby Bunting Group. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Baby Bunting Group better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Baby Bunting Group .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.