Private equity firms account for 50% of Neighbourly Pharmacy Inc.'s (TSE:NBLY) ownership, while individual investors account for 25%
Key Insights
The considerable ownership by private equity firms in Neighbourly Pharmacy indicates that they collectively have a greater say in management and business strategy
The largest shareholder of the company is PCP GP, L.P. with a 50% stake
To get a sense of who is truly in control of Neighbourly Pharmacy Inc. (TSE:NBLY), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% to be precise, is private equity firms. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, individual investors make up 25% of the company’s shareholders.
In the chart below, we zoom in on the different ownership groups of Neighbourly Pharmacy.
See our latest analysis for Neighbourly Pharmacy
What Does The Institutional Ownership Tell Us About Neighbourly Pharmacy?
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.
Neighbourly Pharmacy 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Neighbourly Pharmacy's historic earnings and revenue below, but keep in mind there's always more to the story.
Neighbourly Pharmacy is not owned by hedge funds. The company's largest shareholder is PCP GP, L.P., with ownership of 50%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 7.5% of the shares outstanding, followed by an ownership of 2.2% by the third-largest shareholder.
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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Neighbourly Pharmacy
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.
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 less than 1% of Neighbourly Pharmacy Inc.. It appears that the board holds about CA$1.6m worth of stock. This compares to a market capitalization of CA$995m. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 25% stake in Neighbourly Pharmacy. 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 Equity Ownership
Private equity firms hold a 50% stake in Neighbourly Pharmacy. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Neighbourly Pharmacy better, we need to consider many other factors. Take risks for example - Neighbourly Pharmacy has 1 warning sign we think you should be aware of.
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.
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