Key Insights
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Neighbourly Pharmacy’s significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
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50% of the company is held by a single shareholder (PCP GP, L.P.)
If you want to know who really controls Neighbourly Pharmacy Inc. (TSE:NBLY), 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 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).
And individual investors on the other hand have a 36% ownership in the company.
Let’s delve deeper into each type of owner of Neighbourly Pharmacy, beginning with the chart below.
See our latest analysis for Neighbourly Pharmacy
What Does The Institutional Ownership Tell Us About Neighbourly Pharmacy?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Neighbourly Pharmacy. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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.
We note that hedge funds don’t have a meaningful investment in Neighbourly Pharmacy. Looking at our data, we can see that the largest shareholder is PCP GP, L.P. with 50% of shares outstanding. This implies that they have majority interest control of the future of the company. With 2.5% and 1.9% of the shares outstanding respectively, BMO Asset Management Corp. and CIBC Asset Management Inc. are the second and third largest shareholders.
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 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 an insider can differ slightly between different countries, but members of the board of directors always count. 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 data suggests that insiders own under 1% of Neighbourly Pharmacy Inc. in their own names. It seems the board members have no more than CA$3.0m worth of shares in the CA$840m company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Neighbourly Pharmacy. 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.
Private Equity Ownership
Private equity firms hold a 50% stake in Neighbourly Pharmacy. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we’ve spotted with Neighbourly Pharmacy .
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
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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.
