Both individual investors who control a good portion of Interfor Corporation (TSE:IFP) along with institutions must be dismayed after last week's 6.4% decrease

Key Insights

• Significant control over Interfor by individual investors implies that the general public has more power to influence management and governance-related decisions
• 40% of the business is held by the top 25 shareholders
• Insiders have bought recently

To get a sense of who is truly in control of Interfor Corporation (TSE:IFP), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.4% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 46% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Interfor.

See our latest analysis for Interfor

What Does The Institutional Ownership Tell Us About Interfor?

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.

Interfor already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Interfor, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Interfor. The company's largest shareholder is FMR LLC, with ownership of 6.0%. With 4.8% and 4.5% of the shares outstanding respectively, Dimensional Fund Advisors LP and Pictet Asset Management Limited are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Interfor

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own less than 1% of Interfor Corporation. It seems the board members have no more than CA$11m worth of shares in the CA$1.2b company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 53% stake in Interfor, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Interfor better, we need to consider many other factors. Take risks for example - Interfor has 1 warning sign we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.