Key Insights

• Given the large stake in the stock by institutions, Forsys Metals' stock price might be vulnerable to their trading decisions

• A total of 3 investors have a majority stake in the company with 55% ownership

• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Forsys Metals Corp. (TSE:FSY), it is important to understand the ownership structure of the business. With 48% stake, hedge funds 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 as as result, hedge funds investors reaped the most rewards after the company's stock price gained 19% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 19%.

Let's take a closer look to see what the different types of shareholders can tell us about Forsys Metals.

See our latest analysis for Forsys Metals

ownership-breakdownWhat Does The Institutional Ownership Tell Us About Forsys Metals?

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.

As you can see, institutional investors have a fair amount of stake in Forsys Metals. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Forsys Metals, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth

Our data indicates that hedge funds own 48% of Forsys Metals. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Leo Fund Managers Limited with 31% of shares outstanding. MM Asset Management Inc is the second largest shareholder owning 17% of common stock, and ALPS Advisors, Inc. holds about 7.3% of the company stock. Additionally, the company's CEO Mark Frewin directly holds 0.6% of the total shares outstanding.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Forsys Metals

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 less than 1% of Forsys Metals Corp.. It has a market capitalization of just CA$148m, and the board has only CA$1.4m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public– including retail investors — own 37% 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. To that end, you should learn about the 5 warning signs we've spotted with Forsys Metals (including 3 which are significant) .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.