Institutional investors have a lot riding on Seneca Foods Corporation (NASDAQ:SENE.A) with 41% ownership

Key Insights

• Given the large stake in the stock by institutions, Seneca Foods' stock price might be vulnerable to their trading decisions
• The top 9 shareholders own 51% of the company
• Insider ownership in Seneca Foods is 16%

Every investor in Seneca Foods Corporation (NASDAQ:SENE.A) should be aware of the most powerful shareholder groups. With 41% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And things are looking up for institutional investors after the company gained US$61m in market cap last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 77%.

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

View our latest analysis for Seneca Foods

What Does The Institutional Ownership Tell Us About Seneca Foods?

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.

Seneca Foods 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. 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 Seneca Foods' earnings history below. Of course, the future is what really matters.

Seneca Foods is not owned by hedge funds. The company's largest shareholder is Seneca Foods Pension Plan, with ownership of 15%. In comparison, the second and third largest shareholders hold about 7.3% and 6.5% of the stock. Kraig Kayser, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Furthermore, CEO Paul Palmby is the owner of 2.7% of the company's shares.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. 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 Seneca Foods

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Seneca Foods Corporation. Insiders have a US$95m stake in this US$593m 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-- including retail investors -- own 28% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Seneca Foods that you should be aware of.

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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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.