Market cap

The market capitalization of Bright Health Group, Inc. (NYSE:BHG) jumped $157 million last week as private equity firms with a lot to do with the company were rewarded

A look at the shareholders of Bright Health Group, Inc. (NYSE: BHG) can tell us which group is more powerful. We can see that private equity firms hold the lion’s share of the business with 54% ownership. In other words, the group faces the maximum upside potential (or downside risk).

As a result, private equity firms were the main beneficiaries of last week’s 17% gain.

Let’s take a closer look at what different types of shareholders can tell us about Bright Health Group.

See our latest analysis for Bright Health Group

distribution of property

What does institutional ownership tell us about Bright Health Group?

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 own a sizeable share of Bright Health Group. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking Bright Health Group’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth

earnings-and-revenue-growth

Bright Health Group is not owned by hedge funds. New Enterprise Associates, Inc. is currently the company’s largest shareholder with 35% of the outstanding shares. With 13% and 6.6% of the outstanding shares, respectively, Deer Management Company, LLC and StepStone Group Inc. are the second and third largest shareholders.

To make our study more interesting, we found that the top 3 shareholders hold a majority stake in the company, which means they are powerful enough to influence company decisions.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Bright Health Group Insider Ownership

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

We may report that insiders hold stock in Bright Health Group, Inc. Insiders hold a significant stake worth $54 million. Most would see this as a real positive. If you want to explore the issue of insider alignment, you can click here to see if insiders have been buying or selling.

General public property

With a 22% stake, the general public, consisting mostly of individual investors, has some influence over Bright Health Group. While that size of ownership might not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Private equity ownership

With a 54% stake, private equity firms could sway Bright Health Group’s board. Some investors might be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see the value of the company. Alternatively, these holders could exit the investment after making it public.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. To this end, you should be aware of the 1 warning sign we spotted with Bright Health Group.

If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.

Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

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

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