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A look at the shareholders of Brigham Minerals, Inc. (NYSE:MNRL) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.
With a market capitalization of US$1.1b, Brigham Minerals 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 own shares in the company. Let's delve deeper into each type of owner, to discover more about MNRL. First though, one thing to take into account is that we only perform our analysis on the publicly traded Class A shares of MNRL, which has a significant number of unlisted Class B shares held by insiders and early backers that are not captured in this table.
What Does The Institutional Ownership Tell Us About Brigham Minerals?
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 Brigham Minerals does have institutional investors; and they hold 14% of the 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Brigham Minerals, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Brigham Minerals. 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 Brigham Minerals
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.
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 less than 1% of the class A shares of Brigham Minerals, Inc.. However, this does not account for the Class B shares held by insiders. Including these, management's holdings are substantially larger, with namesake Ben Brigham alone holding 2.4% of the consolidated shares on issue. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own over $24m worth of shares, which should create meaningful alignment between investors and management. It is always good to see insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
The general public holds a 19% stake in MNRL. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
With an ownership of 9.9% of the Class A stock, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. However, we would also note that private equity holds a much larger percentage of the untraded Class B stock, which has the same rights and is convertible into Class A. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
It's always worth thinking about the different groups who own shares in a company. But to understand Brigham Minerals better, we need to consider many other factors.
Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. This article has been edited to add reference to Class B shares at the request of an MNRL company representative.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.