New Zealand markets closed
  • NZX 50

    10,813.92
    +135.25 (+1.27%)
     
  • NZD/USD

    0.6319
    +0.0038 (+0.60%)
     
  • NZD/EUR

    0.5979
    +0.0017 (+0.29%)
     
  • ALL ORDS

    6,762.40
    +71.00 (+1.06%)
     
  • ASX 200

    6,578.70
    +50.30 (+0.77%)
     
  • OIL

    107.06
    +2.79 (+2.68%)
     
  • GOLD

    1,828.10
    -1.70 (-0.09%)
     
  • NASDAQ

    12,105.85
    +408.17 (+3.49%)
     
  • FTSE

    7,208.81
    +188.36 (+2.68%)
     
  • Dow Jones

    31,500.68
    +823.32 (+2.68%)
     
  • DAX

    13,118.13
    +205.54 (+1.59%)
     
  • Hang Seng

    21,719.06
    +445.19 (+2.09%)
     
  • NIKKEI 225

    26,491.97
    +320.72 (+1.23%)
     
  • NZD/JPY

    85.3920
    +0.7130 (+0.84%)
     

Is Procaps Group S.A.'s (NASDAQ:PROC) Shareholder Ownership Skewed Towards Insiders?

·4-min read

Every investor in Procaps Group S.A. (NASDAQ:PROC) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Procaps Group isn't enormous, but it's not particularly small either. It has a market capitalization of US$889m, which means it would generally expect to see some institutions on the share registry. In the chart below, we can see that institutions are not really that prevalent on the share registry. We can zoom in on the different ownership groups, to learn more about Procaps Group.

View our latest analysis for Procaps Group

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Procaps Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Institutions have a very small stake in Procaps Group. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

earnings-and-revenue-growth
earnings-and-revenue-growth

Procaps Group is not owned by hedge funds. The company's CEO Ruben Minski is the largest shareholder with 28% of shares outstanding. The second and third largest shareholders are Deseja Trust and Jose Minski, with an equal amount of shares to their name at 16%. Interestingly, the third-largest shareholder, Jose Minski is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 60% stake.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Procaps Group

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.

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.

Our information suggests that insiders own more than half of Procaps Group S.A.. This gives them effective control of the company. That means they own US$531m worth of shares in the US$889m company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 8.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.

Private Company Ownership

It seems that Private Companies own 18%, of the Procaps Group stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Procaps Group better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Procaps Group .

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.

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

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.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting