Recent uptick might appease GreenFirst Forest Products Inc. (TSE:GFP) hedge funds owners after losing 18% over the past year

Key Insights

• Institutions' substantial holdings in GreenFirst Forest Products implies that they have significant influence over the company's share price
• The top 4 shareholders own 56% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls GreenFirst Forest Products Inc. (TSE:GFP), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 32% to be precise, is hedge funds. Put another way, the group faces the maximum upside potential (or downside risk).

After a year of 18% losses, last week’s 16% gain would be welcomed by hedge funds investors as a possible sign that returns might start trending higher.

Let's take a closer look to see what the different types of shareholders can tell us about GreenFirst Forest Products.

View our latest analysis for GreenFirst Forest Products

What Does The Institutional Ownership Tell Us About GreenFirst Forest Products?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in GreenFirst Forest Products. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see GreenFirst Forest Products' historic earnings and revenue below, but keep in mind there's always more to the story.

It looks like hedge funds own 32% of GreenFirst Forest Products shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is Senvest Management, LLC, with ownership of 24%. Interfor Corporation is the second largest shareholder owning 16% of common stock, and Fundamental Global Inc. holds about 8.6% of the company stock.

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 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of GreenFirst Forest Products

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can report that insiders do own shares in GreenFirst Forest Products Inc.. As individuals, the insiders collectively own CA$5.3m worth of the CA$146m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

Our data indicates that Private Companies hold 6.9%, of the company's shares. 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.

Public Company Ownership

Public companies currently own 25% of GreenFirst Forest Products stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that GreenFirst Forest Products is showing 3 warning signs in our investment analysis , you should know about...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.