Quanex Building Products Corporation (NYSE:NX) is favoured by institutional owners who hold 79% of the company
In This Article:
Key Insights
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Significantly high institutional ownership implies Quanex Building Products' stock price is sensitive to their trading actions
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52% of the business is held by the top 8 shareholders
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Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
If you want to know who really controls Quanex Building Products Corporation (NYSE:NX), 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 79% 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).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's take a closer look to see what the different types of shareholders can tell us about Quanex Building Products.
View our latest analysis for Quanex Building Products
What Does The Institutional Ownership Tell Us About Quanex Building Products?
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 Quanex Building Products. 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. 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 Quanex Building Products, (below). Of course, keep in mind that there are other factors to consider, too.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It would appear that 9.8% of Quanex Building Products shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 13% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.8% and 7.9% of the stock.
On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.