Yahoo Finance Dutch Bros Inc.'s (NYSE:BROS) high institutional ownership speaks for itself as stock continues to impress, up 24% over last week
Key Insights
Institutions' substantial holdings in Dutch Bros implies that they have significant influence over the company's share price
The top 25 shareholders own 48% of the company
If you want to know who really controls Dutch Bros Inc. (NYSE:BROS), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And things are looking up for institutional investors after the company gained US$703m in market cap last week. One-year return to shareholders is currently 30% and last week’s gain was the icing on the cake.
Let's delve deeper into each type of owner of Dutch Bros, beginning with the chart below.
View our latest analysis for Dutch Bros
What Does The Institutional Ownership Tell Us About Dutch Bros?
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.
Dutch Bros already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Dutch Bros' earnings history below. Of course, the future is what really matters.
Dutch Bros is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is TSG Consumer Partners, LP with 7.0% of shares outstanding. With 6.7% and 4.4% of the shares outstanding respectively, The Vanguard Group, Inc. and T. Rowe Price Group, Inc. are the second and third largest shareholders.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Dutch Bros
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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can report that insiders do own shares in Dutch Bros Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$462m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Dutch Bros. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
Private equity firms hold a 7.0% stake in Dutch Bros. This suggests they can be influential in key policy decisions. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Dutch Bros better, we need to consider many other factors. For instance, we've identified 2 warning signs for Dutch Bros 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.
