Is Green Plains Inc. (NASDAQ:GPRE) Popular Amongst Institutions?

By
Simply Wall St
Published
April 11, 2021
NasdaqGS:GPRE

The big shareholder groups in Green Plains Inc. (NASDAQ:GPRE) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.

Green Plains has a market capitalization of US$1.2b, so we would expect some institutional investors to have noticed the stock. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Green Plains.

See our latest analysis for Green Plains

ownership-breakdown
NasdaqGS:GPRE Ownership Breakdown April 11th 2021

What Does The Institutional Ownership Tell Us About Green Plains?

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.

Green Plains already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Green Plains' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:GPRE Earnings and Revenue Growth April 11th 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Green Plains is not owned by hedge funds. BlackRock, Inc. is currently the largest shareholder, with 13% of shares outstanding. With 6.2% and 5.6% of the shares outstanding respectively, The Vanguard Group, Inc. and Dimensional Fund Advisors L.P. are the second and third largest shareholders. Furthermore, CEO Todd Becker is the owner of 1.4% of the company's shares.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 13 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Green Plains

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. 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.

I can report that insiders do own shares in Green Plains Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$60m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a 13% stake in Green Plains. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Green Plains better, we need to consider many other factors. Take risks for example - Green Plains has 4 warning signs (and 2 which are potentially serious) we think you should know about.

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. 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.
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