Key Insights
- Institutions’ substantial holdings in Westrock Coffee Company implies that they have significant influence over the company’s share price
- A total of 3 investors have a majority stake in the company with 52% ownership
- Insider ownership in Westrock Coffee Company is 22%
If you want to know who really controls Westrock Coffee Company, LLC (NASDAQ:WEST), then you’ll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are hedge funds with 31% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Last week’s 6.2% gain means that hedge funds investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 22% and last week’s gain was the icing on the cake.
Let’s take a closer look to see what the different types of shareholders can tell us about Westrock Coffee Company.
View our latest analysis for Westrock Coffee Company
What Does The Institutional Ownership Tell Us About Westrock Coffee Company?
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.
We can see that Westrock Coffee Company does have institutional investors; and they hold a good portion of the company’s stock. 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. 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 Westrock Coffee Company’s earnings history below. Of course, the future is what really matters.
It would appear that 31% of Westrock Coffee Company shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Westrock Asset Management is currently the largest shareholder, with 31% of shares outstanding. The second and third largest shareholders are Southeastern Asset Management, Inc. and HF Capital, with an equal amount of shares to their name at 11%.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Westrock Coffee Company
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.
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 information suggests that insiders maintain a significant holding in Westrock Coffee Company, LLC. It has a market capitalization of just US$892m, and insiders have US$196m worth of shares in their own names. 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
With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Westrock Coffee Company. 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 7.7% stake in Westrock Coffee Company. 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.
Private Company Ownership
We can see that Private Companies own 11%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with Westrock Coffee Company , and understanding them should be part of your investment process.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
Valuation is complex, but we’re helping make it simple.
Find out whether Westrock Coffee Company is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
