Could 4Front Ventures Corp.’s (CNSX:FFNT) Investor Composition Influence The Stock Price?

A look at the shareholders of 4Front Ventures Corp. (CNSX:FFNT) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

4Front Ventures is not a large company by global standards. It has a market capitalization of CA$123m, which means it wouldn’t have the attention of many institutional investors. In the chart below below, we can see that institutions don’t own many shares in the company. We can zoom in on the different ownership groups, to learn more about FFNT.

Check out our latest analysis for 4Front Ventures

CNSX:FFNT Ownership Summary, August 9th 2019
CNSX:FFNT Ownership Summary, August 9th 2019

What Does The Institutional Ownership Tell Us About 4Front Ventures?

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.

Less than 5% of 4Front Ventures is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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.

CNSX:FFNT Income Statement, August 9th 2019
CNSX:FFNT Income Statement, August 9th 2019

Hedge funds don’t have many shares in 4Front Ventures. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of 4Front Ventures

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.

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.

Our most recent data indicates that insiders own the majority of 4Front Ventures Corp.. This means they can collectively make decisions for the company. Given it has a market cap of CA$123m, that means they have CA$110m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public — mostly retail investors — own 59% of 4Front Ventures . This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.