Painful week for retail investors invested in 5N Plus Inc. (TSE:VNP) after 7.7% drop, institutions also suffered losses

Key Insights

• Significant control over 5N Plus by retail investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 14 shareholders
• Institutional ownership in 5N Plus is 48%

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Every investor in 5N Plus Inc. (TSE:VNP) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions, who own 48% shares weren’t spared from last week’s CA$106m market cap drop, retail investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of 5N Plus, beginning with the chart below.

View our latest analysis for 5N Plus

What Does The Institutional Ownership Tell Us About 5N Plus?

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 5N Plus. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at 5N Plus' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in 5N Plus. Caisse de dépôt et placement du Québec is currently the largest shareholder, with 18% of shares outstanding. Letko, Brosseau & Associates Inc. is the second largest shareholder owning 12% of common stock, and FMR LLC holds about 4.7% of the company stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of 5N Plus

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 see that insiders own shares in 5N Plus Inc.. In their own names, insiders own CA$60m worth of stock in the CA$1.3b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 48% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand 5N Plus better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with 5N Plus .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.