Oportun Financial Corporation’s (NASDAQ:OPRT) latest 12% drop adds to year-on-year losses, institutional investors may consider drastic measures

To get an idea of ​​who really controls Oportun Financial Corporation (NASDAQ:OPRT), it’s important to understand the company’s ownership structure. With 69% of the capital, the institutions hold the maximum number of shares in the company. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.

As a result, institutional investors suffered the highest losses last week after the market capitalization plummeted by $32 million. The recent loss, on top of a 72% year-on-year loss to shareholders, may not be suitable for this group of investors. Often referred to as “market makers,” institutions wield significant power in influencing the price dynamics of any stock. Therefore, if the downtrend continues, institutions may come under pressure to sell Oportun Financial, which could negatively impact individual investors.

Let’s dive deeper into each type of Opportun Financial owner, starting with the table below.

Discover our latest analysis for Oportun Financial

NasdaqGS: distribution of ownership of the OPRT on August 21, 2022

What does institutional ownership tell us about Oportun Financial?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

Oportun Financial already has institutions on the share register. Indeed, they hold a respectable stake in the company. 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 out Oportun Financial’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
NasdaqGS: OPRT Earnings and Revenue Growth August 21, 2022

Investors should note that institutions actually own more than half of the company, so they can collectively wield significant power. Oportun Financial does not belong to hedge funds. Institutional Venture Partners is currently the largest shareholder, with 10% of the outstanding shares. For context, the second shareholder owns approximately 8.3% of the outstanding shares, followed by a 7.4% ownership by the third shareholder. Additionally, we found that Raul Vazquez, the CEO, owns 2.5% of the shares awarded in his name.

Upon closer inspection, we found that more than half of the company’s shares are held by the top 10 shareholders, suggesting that the interests of larger shareholders are to some extent balanced by those of smaller ones.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Insider ownership of Oportun Financial

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

We can see that insiders own shares in Oportun Financial Corporation. In their own name, insiders hold $13 million worth of stock in the $222 million company. It’s good to see insider investing, but it might be worth checking to see if those insiders have been buying.

General public property

The general public, who are usually individual investors, hold a 15% stake in Oportun Financial. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Private equity ownership

Private equity firms hold a 10% stake in Oportun Financial. This suggests that they can influence key policy decisions. This might appeal to some, because private equity is sometimes an activist who holds management accountable. But other times, the private equity sells off, after taking the company public.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. Like risks, for example. Every business has them, and we’ve spotted 4 warning signs for Oportun Financial (1 of which makes us a little uncomfortable!) that you should know.

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter 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 in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

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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