While individual investors own 11% of Vericity, Inc. (NASDAQ:VERY), private equity firms are its largest shareholders with 76% ownership
Key Insights
The considerable ownership by private equity firms in Vericity indicates that they collectively have a greater say in management and business strategy
76% of the company is held by a single shareholder (J.C. Flowers & Co. LLC)
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
To get a sense of who is truly in control of Vericity, Inc. (NASDAQ:VERY), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 76% to be precise, is private equity firms. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, individual investors make up 11% of the company’s shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about Vericity.
View our latest analysis for Vericity
What Does The Institutional Ownership Tell Us About Vericity?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Institutions have a very small stake in Vericity. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
We note that hedge funds don't have a meaningful investment in Vericity. Our data shows that J.C. Flowers & Co. LLC is the largest shareholder with 76% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 4.2% and 2.2% of the stock. James Hohmann, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Vericity
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. 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.
We can report that insiders do own shares in Vericity, Inc.. It has a market capitalization of just US$104m, and insiders have US$9.7m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 11% stake in the company, and hence can't 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.
Private Equity Ownership
With an ownership of 76%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Vericity has 2 warning signs we think you should be aware of.
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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.
