With 40% ownership, Maple Leaf Foods Inc. (TSE:MFI) insiders have a lot at stake
Key Insights
Insiders appear to have a vested interest in Maple Leaf Foods' growth, as seen by their sizeable ownership
The top 2 shareholders own 50% of the company
To get a sense of who is truly in control of Maple Leaf Foods Inc. (TSE:MFI), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 40% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
So it follows, every decision made by insiders of Maple Leaf Foods regarding the company's future would be crucial to them.
Let's take a closer look to see what the different types of shareholders can tell us about Maple Leaf Foods.
View our latest analysis for Maple Leaf Foods
What Does The Institutional Ownership Tell Us About Maple Leaf Foods?
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.
We can see that Maple Leaf Foods does have institutional investors; and they hold a good portion of the company's stock. 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 Maple Leaf Foods, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Maple Leaf Foods. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Maple Leaf Foods' case, its Top Key Executive, Michael McCain, is the largest shareholder, holding 40% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 2.3%, of the shares outstanding, respectively.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.
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 Maple Leaf Foods
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.
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 a reasonable proportion of Maple Leaf Foods Inc.. Insiders own CA$1.2b worth of shares in the CA$2.9b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 33% stake in the company, and hence can't easily be ignored. 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:
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. For example, we've discovered 3 warning signs for Maple Leaf Foods that you should be aware of before investing here.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
