Could the ownership structure of The Future Consumer Limited (NSE: FCONSUMER) tell us anything useful?

If you want to know who really controls Future Consumer Limited (NSE: FCONSUMER), then you will need to look at the makeup of its share register. Institutions often own shares in larger companies, and we would expect insiders to own a noticeable percentage of smaller ones. Companies that were previously owned by the state tend to have fewer insiders.

Future Consumer is a small company with a market capitalization of £ 16 billion, so it may still slip under the radar of many institutional investors. In the graph below, we can see that the institutions hold shares in the company. We can zoom in on the different ownership groups, to find out more about Future Consumer.

Check out our latest analysis for Future Consumer

Distribution of the NSEI property: FCONSUMER September 12, 2021

What does institutional ownership tell us about the future consumer?

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 businesses to have some institutions listed, especially if they are growing.

Future Consumer already has institutions on the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out Future Consumer’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

profit and revenue growth
NSEI: FCONSUMER Profits and Revenue Growth September 12, 2021

We note that the hedge funds do not have a significant investment in Future Consumer. Future Group is currently the largest shareholder, with 13% of the shares outstanding. With 8.0% and 7.5% of the outstanding shares respectively, Verlinvest SA and Proterra Investment Partners LP are the second and third shareholders.

A closer look at our ownership figures suggests that the top 14 shareholders have a combined 50% ownership, implying that no shareholder has a majority.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. Our information suggests there is no analyst coverage of the stock, so it is likely little known.

Insider ownership of the future consumer

The definition of company insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that Insiders of Future Consumer Limited own less than 1% of the company. We note, however, that it is possible that insiders may have an indirect interest through a private company or other corporate structure. It appears that the board of directors owns around 57 million yen of shares. This compares to a market cap of ₹ 16b. I generally like to see a more invested board. However, it might be worth checking to see if these insiders have bought.

General public property

With a 50% stake, the general public has some influence on Future Consumer. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.

Private shareholders

With a 21% stake, private equity firms are able to play a role in shaping corporate strategy with an emphasis on value creation. Some might like this, as sometimes private capital is activists who hold management accountable. But other times, the private equity sells, after you take the company public.

Owned by a private company

We can see that the private companies own 19% of the issued shares. It may be worth pursuing the question further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. Consider, for example, the ever-present specter of investment risk. We have identified 4 warning signs with Future Consumer (at least 1 which is a bit obnoxious), and understanding them should be part of your investment process.

Sure, you might find a fantastic investment looking elsewhere. So take a look at this free list of interesting companies.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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