Private companies among Winpak Ltd.'s (TSE:WPK) largest stockholders and were hit after last week's 6.2% price drop

By
Simply Wall St
Published
November 28, 2021
TSX:WPK
Source: Shutterstock

If you want to know who really controls Winpak Ltd. (TSE:WPK), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 6.2% decline in share price, private companies suffered the most losses.

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

See our latest analysis for Winpak

ownership-breakdown
TSX:WPK Ownership Breakdown November 29th 2021

What Does The Institutional Ownership Tell Us About Winpak?

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 Winpak. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Winpak, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
TSX:WPK Earnings and Revenue Growth November 29th 2021

Winpak is not owned by hedge funds. Wihuri International Oy is currently the largest shareholder, with 52% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 2.3% of the shares outstanding, followed by an ownership of 1.5% by the third-largest shareholder.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Winpak

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. 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.

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.

Our information suggests that Winpak Ltd. insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own CA$7.6m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 29% 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

It seems that Private Companies own 52%, of the Winpak stock. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Winpak better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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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