Individual investors among GreenFirst Forest Products Inc.'s (CVE:GFP) largest shareholders, saw gain in holdings value after stock jumped 13% last week

By
Simply Wall St
Published
January 12, 2022
TSX:GFP
Source: Shutterstock

Every investor in GreenFirst Forest Products Inc. (CVE:GFP) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 40% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, individual investors benefitted the most after the company's market cap rose by CA$44m last week.

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

Check out our latest analysis for GreenFirst Forest Products

ownership-breakdown
TSXV:GFP Ownership Breakdown January 12th 2022

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.

Since institutions own only a small portion of GreenFirst Forest Products, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

earnings-and-revenue-growth
TSXV:GFP Earnings and Revenue Growth January 12th 2022

Our data indicates that hedge funds own 24% 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. Senvest Management, LLC is currently the largest shareholder, with 24% of shares outstanding. With 16% and 4.0% of the shares outstanding respectively, Rayonier Advanced Materials Inc. and Ballantyne Strong, Inc are the second and third largest shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

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.

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 report that insiders do own shares in GreenFirst Forest Products Inc.. It has a market capitalization of just CA$376m, and insiders have CA$25m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GreenFirst Forest Products. 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

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

We can see that public companies hold 20% of the GreenFirst Forest Products shares on issue. 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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with GreenFirst Forest Products (at least 2 which are a bit unpleasant) , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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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