To get a sense of who is truly in control of Biome Australia Limited (ASX:BIO), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 56% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While individual investors were the group that reaped the most benefits after last week’s 10% price gain, insiders also received a 34% cut.
Let's take a closer look to see what the different types of shareholders can tell us about Biome Australia.
What Does The Lack Of Institutional Ownership Tell Us About Biome Australia?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Biome Australia might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
ASX:BIO Earnings and Revenue Growth July 17th 2024
Biome Australia is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Blair William Brabin Norfolk with 8.5% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.9% and 5.1% of the stock. Interestingly, the second-largest shareholder, Douglas Chee Loh is also Chief Financial Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.
On studying our ownership data, we found that 19 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Biome Australia
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a reasonable proportion of Biome Australia Limited. Insiders have a AU$51m stake in this AU$149m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public -- including retail investors -- own 56% of Biome Australia. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Private Company Ownership
Our data indicates that Private Companies hold 8.5%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Biome Australia better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Biome Australia you should know about.
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.
