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Institutional investors in Methanex Corporation (TSE:MX) lost 5.4% last week but have reaped the benefits of longer-term growth


Institutional investors in Methanex Corporation (TSE:MX) lost 5.4% last week but have reaped the benefits of longer-term growth

Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

If you want to know who really controls Methanex Corporation (TSE:MX), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 78% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 5.4% in value last week. However, the 14% one-year returns may have helped alleviate their overall losses. But they would probably be wary of future losses.

Let's delve deeper into each type of owner of Methanex, beginning with the chart below.

View our latest analysis for Methanex

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.

Methanex already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Methanex's historic earnings and revenue below, but keep in mind there's always more to the story.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Methanex. Looking at our data, we can see that the largest shareholder is M&G Investment Management Limited with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.7% and 7.1% of the stock.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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