Given the large stake in the stock by institutions, GreenFirst Forest Products' stock price might be vulnerable to their trading decisions
56% of the business is held by the top 4 shareholders
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in GreenFirst Forest Products Inc. (TSE:GFP) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 32% to be precise, is hedge funds. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Hedge funds investors would appreciate the 46% increase in share price last week, given their one-year losses have totalled a disappointing 23%.
Let's delve deeper into each type of owner of GreenFirst Forest Products, beginning with the chart below.
What Does The Institutional Ownership Tell Us About GreenFirst Forest Products?
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.
As you can see, institutional investors have a fair amount of stake in GreenFirst Forest Products. 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 GreenFirst Forest Products, (below). Of course, keep in mind that there are other factors to consider, too.
TSX:GFP Earnings and Revenue Growth September 29th 2024
Our data indicates that hedge funds own 32% of GreenFirst Forest Products. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Senvest Management, LLC with 24% of shares outstanding. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 8.6% by the third-largest shareholder.
To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of GreenFirst Forest Products
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Shareholders would probably be interested to learn that insiders own shares in GreenFirst Forest Products Inc.. It has a market capitalization of just CA$140m, and insiders have CA$5.1m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GreenFirst Forest Products. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
We can see that Private Companies own 6.9%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Public Company Ownership
Public companies currently own 25% of GreenFirst Forest Products stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand GreenFirst Forest Products better, we need to consider many other factors. Take risks for example - GreenFirst Forest Products has 3 warning signs we think you should be aware of.
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.
