Key Insights

• Betterware de MéxicoP.I. de's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 54% of the company is held by a single shareholder (Campalier, S.A. de C.V.)
• Institutions own 13% of Betterware de MéxicoP.I. de

Every investor in Betterware de México, S.A.P.I. de C.V. (NYSE:BWMX) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to US$554m last week, private companies would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Betterware de MéxicoP.I. de.

What Does The Institutional Ownership Tell Us About Betterware de MéxicoP.I. de?

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 Betterware de MéxicoP.I. de 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. 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 Betterware de MéxicoP.I. de's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Betterware de MéxicoP.I. de. The company's largest shareholder is Campalier, S.A. de C.V., with ownership of 54%. This implies that they have majority interest control of the future of the company. MMBG Investment Advisors Co. is the second largest shareholder owning 11% of common stock, and Morgan Stanley, Investment Banking and Brokerage Investments holds about 0.4% of the company stock.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Betterware de MéxicoP.I. de

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. 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.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Betterware de MéxicoP.I. de. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 54%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Betterware de MéxicoP.I. de that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com