Beacon Lighting Group Limited (ASX:BLX) boasts of bullish insider sentiment with 57% ownership and they have been buying lately

editorial-team@simplywallst.com (Simply Wall St)

Sun, Oct 27, 2024, 10:27 PM 4 min read

To get a sense of who is truly in control of Beacon Lighting Group Limited (ASX:BLX), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Notably, insiders have bought shares recently. This might indicate that they expect share prices to rise in the near future.

In the chart below, we zoom in on the different ownership groups of Beacon Lighting Group.

See our latest analysis for Beacon Lighting Group

ownership-breakdown — ASX:BLX Ownership Breakdown October 28th 2024

What Does The Institutional Ownership Tell Us About Beacon Lighting Group?

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.

We can see that Beacon Lighting Group 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 Beacon Lighting Group's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth — ASX:BLX Earnings and Revenue Growth October 28th 2024

Beacon Lighting Group is not owned by hedge funds. From our data, we infer that the largest shareholder is Ian Robinson (who also holds the title of Top Key Executive) with 55% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. In comparison, the second and third largest shareholders hold about 7.7% and 2.9% of the stock.

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 Beacon Lighting Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 own more than half of Beacon Lighting Group Limited. This gives them effective control of the company. So they have a AU$393m stake in this AU$688m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Beacon Lighting Group. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Beacon Lighting Group has 1 warning sign we think you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.