Home Hedge Funds Private equity firms among Restaurant Brands New Zealand Limited’s (NZSE:RBD) largest stockholders...

Private equity firms among Restaurant Brands New Zealand Limited’s (NZSE:RBD) largest stockholders and were hit after last week’s 8.8% price drop

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Simply Wall St

Every investor in Restaurant Brands New Zealand Limited (NZSE:RBD) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 75% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to NZ$992m last week, private equity firms would have faced the highest losses than any other shareholder groups of the company.

Let’s delve deeper into each type of owner of Restaurant Brands New Zealand, beginning with the chart below.

If you’re not interested in researching RBD’s ownership structure, we have a free list of interesting investing ideas to potentially inspire your next investment!

ownership-breakdown
NZSE:RBD Ownership Breakdown September 21st 2022

What Does The Institutional Ownership Tell Us About Restaurant Brands New Zealand?

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.

As you can see, institutional investors have a fair amount of stake in Restaurant Brands New Zealand. 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. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Restaurant Brands New Zealand’s historic earnings and revenue below, but keep in mind there’s always more to the story.

earnings-and-revenue-growth
NZSE:RBD Earnings and Revenue Growth September 21st 2022

Hedge funds don’t have many shares in Restaurant Brands New Zealand. The company’s largest shareholder is Finaccess Capital, with ownership of 75%. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 2.8% of the shares outstanding, followed by an ownership of 1.3% by the third-largest shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Restaurant Brands New Zealand

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of Restaurant Brands New Zealand Limited in their own names. It appears that the board holds about NZ$2.1m worth of stock. This compares to a market capitalization of NZ$992m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Restaurant Brands New Zealand. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

Private equity firms hold a 75% stake in Restaurant Brands New Zealand. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

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. To that end, you should learn about the 4 warning signs we’ve spotted with Restaurant Brands New Zealand (including 2 which don’t sit too well with us) .

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.

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.

Valuation is complex, but we’re helping make it simple.

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