June 19, 2024
Investors

With 52% ownership in Green Brick Partners, Inc. (NYSE:GRBK), institutional investors have a lot riding on the business


Key Insights

  • Significantly high institutional ownership implies Green Brick Partners’ stock price is sensitive to their trading actions

  • The top 8 shareholders own 51% of the company

  • Insiders have sold recently

If you want to know who really controls Green Brick Partners, Inc. (NYSE:GRBK), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 52% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And things are looking up for institutional investors after the company gained US$152m in market cap last week. One-year return to shareholders is currently 83% and last week’s gain was the icing on the cake.

Let’s delve deeper into each type of owner of Green Brick Partners, beginning with the chart below.

Check out our latest analysis for Green Brick Partners

ownership-breakdown

ownership-breakdown

What Does The Institutional Ownership Tell Us About Green Brick Partners?

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.

As you can see, institutional investors have a fair amount of stake in Green Brick Partners. 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. 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 Green Brick Partners, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth

earnings-and-revenue-growth

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Our data indicates that hedge funds own 23% of Green Brick Partners. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Greenlight Capital, Inc. is currently the largest shareholder, with 23% of shares outstanding. With 9.0% and 4.8% of the shares outstanding respectively, BlackRock, Inc. and The Vanguard Group, Inc. are the second and third largest shareholders. Furthermore, CEO James Brickman is the owner of 3.6% of the company’s shares.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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

Insider Ownership Of Green Brick Partners

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 some shares in Green Brick Partners, Inc.. The insiders have a meaningful stake worth US$173m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 18% stake in Green Brick Partners. 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 Brick Partners better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we’ve spotted with Green Brick Partners .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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