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Could Beasley Broadcast Group Inc’s (NASDAQ:BBGI) Investor Composition Impacts Your Returns?

Lee Kay

The big shareholder groups in Beasley Broadcast Group Inc (NASDAQ:BBGI) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.’

Beasley Broadcast Group is not a large company by global standards. It has a market capitalization of US$189.8m, which means it wouldn’t have the attention of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about BBGI.

Check out our latest analysis for Beasley Broadcast Group

NasdaqGM:BBGI Ownership Summary August 31st 18
NasdaqGM:BBGI Ownership Summary August 31st 18

What Does The Institutional Ownership Tell Us About Beasley Broadcast Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Beasley Broadcast Group does have institutional investors; and they hold 16.1% of the stock. 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. 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 Beasley Broadcast Group’s earnings history, below. Of course, the future is what really matters.

NasdaqGM:BBGI Income Statement Export August 31st 18
NasdaqGM:BBGI Income Statement Export August 31st 18

We note that hedge funds don’t have a meaningful investment in Beasley Broadcast Group. 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 Beasley Broadcast 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 most recent data indicates that insiders own the majority of Beasley Broadcast Group Inc. This means they can collectively make decisions for the company. So they have a US$122.3m stake in this US$189.8m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, with a 17.7% stake in the company, will not easily be ignored. 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 Beasley Broadcast Group better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.