The ownership structure of Forsys Metals Corp. (TSE:FSY) could she tell us something useful?

Every investor in Forsys Metals Corp. (TSE:FSY) needs to know the most powerful shareholder groups. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of C$131 million, Forsys Metals is a small cap stock, so it may not be well known to many institutional investors. In the chart below, we can see that institutional investors have bought the company. Let’s take a closer look at what different types of shareholders can tell us about Forsys Metals.

See our latest analysis for Forsys Metals

TSX:FSY Ownership Allocation July 23, 2022

What does institutional ownership tell us about Forsys Metals?

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.

Forsys Metals already has institutions on the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it is worth checking out the Forsys Metals earnings history below. Of course, the future is what really matters.

TSX: FSY Earnings and Revenue Growth July 23, 2022

Our data shows that hedge funds own 44% of Forsys Metals. This is worth noting, as hedge funds are often quite active investors, who may try to influence management. Many want value creation (and a rise in share price) in the short to medium term. Leo Fund Managers Limited is currently the company’s largest shareholder with 36% of the outstanding shares. Meanwhile, the second and third largest shareholders hold 8.2% and 4.8% of the outstanding shares respectively. Additionally, the company’s CEO, Mark Frewin, directly owns 0.6% of the total shares outstanding.

Looking further, we found that 52% of the shares are held by the top 4 shareholders. In other words, these shareholders have a say in the decisions of the company.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. As far as we can tell, there’s no analyst coverage of the company, so it’s probably flying under the radar.

Insider ownership of Forsys Metals

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

We can report that insiders own shares of Forsys Metals Corp. Its market capitalization is only C$131 million and insiders hold C$1.4 million of shares, in their own name. This shows at least some alignment, but we generally like to see larger insider holdings. You can click here to see if these insiders have been buying or selling.

General public property

With a 46% stake, the general public, consisting mainly of individual investors, has some influence over Forsys Metals. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other large shareholders.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Forsys Metals, we need to consider many other factors. Take risks for example – Forsys Metals has 3 warning signs (and 1 which is significant) that we think you should know about.

Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.