What Kind Of Investors Own Most Of Burford Capital Limited (LON:BUR)?
Every investor in Burford Capital Limited (LON:BUR) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.
With a market capitalization of UK£1.2b, Burford Capital is a decent size, so it is probably on the radar of institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholder can tell us about Burford Capital.
View our latest analysis for Burford Capital
What Does The Institutional Ownership Tell Us About Burford Capital?
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.
As you can see, institutional investors have a fair amount of stake in Burford Capital. 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 Burford Capital's earnings history, below. Of course, the future is what really matters.
Our data indicates that hedge funds own 6.4% of Burford Capital. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Invesco Ltd. is currently the largest shareholder, with 9.5% of shares outstanding. With 6.4% and 5.1% of the shares outstanding respectively, Conifer Management, Llc and Mithaq Capital are the second and third largest shareholders. In addition, we found that Christopher Bogart, the CEO has 0.0413606 of the shares allocated to his name
After doing some more digging, we found that the top 14 have the combined ownership of 51% in the company, suggesting that no one share holder has significant control over the company.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Burford Capital
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Shareholders would probably be interested to learn that insiders own shares in Burford Capital Limited. The insiders have a meaningful stake worth UK£106m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
With a 38% ownership, the general public have some degree of sway over BUR. 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.
Private Company Ownership
We can see that Private Companies own 5.1%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Burford Capital better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Burford Capital you should be aware of, and 1 of them is significant.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
This article by Simply Wall St is general in nature. 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.
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