Home Private Equity Believe S.A.’s (EPA:BLV) last week’s 7.5% decline must have disappointed private equity...

Believe S.A.’s (EPA:BLV) last week’s 7.5% decline must have disappointed private equity firms who have a significant stake


Key Insights

  • Believe’s significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
  • The top 2 shareholders own 59% of the company
  • 13% of Believe is held by insiders

A look at the shareholders of Believe S.A. (EPA:BLV) can tell us which group is most powerful. With 65% stake, private equity firms possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to €1.1b 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 Believe, beginning with the chart below.

See our latest analysis for Believe

ENXTPA:BLV Ownership Breakdown May 26th 2023

What Does The Institutional Ownership Tell Us About Believe?

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.

We can see that Believe 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 Believe’s earnings history below. Of course, the future is what really matters.

ENXTPA:BLV Earnings and Revenue Growth May 26th 2023

We note that hedge funds don’t have a meaningful investment in Believe. TCMI Inc. is currently the company’s largest shareholder with 42% of shares outstanding. Ventech SA is the second largest shareholder owning 17% of common stock, and Denis Ladegaillerie holds about 13% of the company stock. Denis Ladegaillerie, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Believe

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Believe S.A.. It is very interesting to see that insiders have a meaningful €138m stake in this €1.1b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public– including retail investors — own 13% stake in the company, and hence can’t easily be ignored. 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

With a stake of 65%, private equity firms could influence the Believe board. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We’ve spotted 1 warning sign for Believe you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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

Find out whether Believe is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

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