Large shareholder groups in BrightSpire Capital, Inc. (NYSE: BRSP) have power over the company. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. We also tend to see a decline in insider participation in companies that were previously public.
With a market capitalization of US$1.1 billion, BrightSpire Capital is a decent size, so it’s probably on the radar of institutional investors. Our analysis of societal ownership below shows that institutions own shares in society. Let’s take a closer look at what different types of shareholders can tell us about BrightSpire Capital.
Check out our latest analysis for BrightSpire Capital
What does institutional ownership tell us about BrightSpire 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 is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
As you can see, institutional investors own a sizeable portion of BrightSpire Capital. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking BrightSpire Capital’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.
Investors should note that institutions actually own more than half of the company, so they can collectively wield significant power. It appears that hedge funds own 7.8% of shares in BrightSpire Capital. This catches my attention because hedge funds sometimes try to influence management or make changes that will create short-term shareholder value. Our data shows that DigitalBridge Operating Co. LLC is the largest shareholder with 24% of shares outstanding. With 7.8% and 6.5% of the shares outstanding, respectively, Nut Tree Capital Management, LP and The Vanguard Group, Inc. are the second and third largest shareholders. Additionally, the company’s CEO, Michael Mazzei, directly owns 0.7% of the total shares outstanding.
We dug a little deeper and found that 10 of the major shareholders make up about 51% of the register, implying that along with the large shareholders, there are a few smaller shareholders, thereby balancing everyone’s interests somewhat.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Insider ownership of BrightSpire Capital
The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our most recent data indicates that insiders own shares of BrightSpire Capital, Inc. Insiders own a significant stake worth $18 million. Most would see this as a real positive. Most would say this shows the alignment of interests between shareholders and the board. Still, it might be worth checking to see if these insiders have sold.
General public property
With a 36% stake, the general public, consisting mostly of individual investors, has some influence over BrightSpire Capital. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.
While it is worth considering the different groups that own a business, there are other, even more important factors. For example, we found 3 warning signs for BrightSpire Capital (2 are potentially serious!) which you should be aware of before investing here.
But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.