After a year of 8.7% returns, Green Brick Partners, Inc.'s (NYSE:GRBK) share price drop last week may have less of an impact on institutional investors
A look at the shareholders of Green Brick Partners, Inc. (NYSE:GRBK) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 8.1% in value last week. However, the 8.7% one-year return to shareholders may have helped lessen their pain. But they would probably be wary of future losses.
Let's take a closer look to see what the different types of shareholders can tell us about Green Brick Partners.
What Does The Institutional Ownership Tell Us About Green Brick Partners?
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.
We can see that Green Brick Partners does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Green Brick Partners, (below). Of course, keep in mind that there are other factors to consider, too.
NYSE:GRBK Earnings and Revenue Growth December 25th 2024
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It would appear that 21% of Green Brick Partners shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Greenlight Capital, Inc. with 21% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 5.1% of the stock. Additionally, the company's CEO James Brickman directly holds 4.3% of the total shares outstanding.
We did some more digging and found that 7 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Green Brick Partners
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 Green Brick Partners, Inc.. This is a big company, so it is good to see this level of alignment. Insiders own US$203m 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
The general public, who are usually individual investors, hold a 14% stake in Green Brick Partners. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Green Brick Partners better, we need to consider many other factors. For example, we've discovered 2 warning signs for Green Brick Partners (1 is concerning!) that you should be aware of before investing here.
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.
