If you want to know who really controls BrainChip Holdings Ltd (ASX:BRN), then you’ll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes “a business with enduring competitive advantages that is run by able and owner-oriented people.” So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.
BrainChip Holdings is a smaller company with a market capitalization of AU$486m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about BrainChip Holdings.
View our latest analysis for BrainChip Holdings
ASX:BRN Ownership Breakdown August 28th 2020What Does The Institutional Ownership Tell Us About BrainChip Holdings?
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 BrainChip Holdings does have institutional investors; and they hold a good portion of the company’s stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 BrainChip Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
ASX:BRN Earnings and Revenue Growth August 28th 2020BrainChip Holdings is not owned by hedge funds. Our data suggests that Peter Van der Made, who is also the company’s Top Key Executive, holds the most number of shares at 12%. When an insider holds a sizeable amount of a company’s stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. With 8.0% and 7.8% of the shares outstanding respectively, Anil Mankar and Robert Mitro are the second and third largest shareholders. Interestingly, the second-largest shareholder, Anil Mankar is also Top Key Executive, again, pointing towards strong insider ownership amongst the company’s top shareholders. Additionally, the company’s CEO Louis DiNardo directly holds 0.8% of the total shares outstanding.
On studying our ownership data, we found that 19 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of BrainChip Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a reasonable proportion of BrainChip Holdings Ltd. Insiders have a AU$153m stake in this AU$486m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
