Institutional owners may take dramatic actions as Gentoo Media Inc.'s (OB:G2MNO) recent 11% drop adds to one-year losses

Key Insights

• Given the large stake in the stock by institutions, Gentoo Media's stock price might be vulnerable to their trading decisions
• The top 7 shareholders own 50% of the company
• Recent purchases by insiders

Every investor in Gentoo Media Inc. (OB:G2MNO) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 32% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, institutional investors endured the highest losses last week after market cap fell by kr458m. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 0.7% for shareholders. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the decline continues, institutional investors may be pressured to sell Gentoo Media which might hurt individual investors.

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

View our latest analysis for Gentoo Media

What Does The Institutional Ownership Tell Us About Gentoo Media?

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.

Gentoo Media 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 Gentoo Media, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Gentoo Media. The company's largest shareholder is MJ Foundation, Endowment Arm, with ownership of 13%. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 8.0% by the third-largest shareholder. Tomasz Juroszek, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Jonas Warrer, the CEO has 0.5% of the shares allocated to their name.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Gentoo Media

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Gentoo Media Inc.. Insiders have a kr1.1b stake in this kr3.7b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 18% stake in Gentoo Media. 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 19%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. For example, we've discovered 3 warning signs for Gentoo Media (1 is significant!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.