Ballard Power Systems Inc.'s (TSE:BLDP) market cap touched CA$1.3b last week, benefiting both individual investors who own 59% as well as institutions
Key Insights
The considerable ownership by individual investors in Ballard Power Systems indicates that they collectively have a greater say in management and business strategy
34% of the business is held by the top 25 shareholders
To get a sense of who is truly in control of Ballard Power Systems Inc. (TSE:BLDP), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Following a 11% increase in the stock price last week, individual investors profited the most, but institutions who own 25% stock also stood to gain from the increase.
In the chart below, we zoom in on the different ownership groups of Ballard Power Systems.
See our latest analysis for Ballard Power Systems
What Does The Institutional Ownership Tell Us About Ballard Power Systems?
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 Ballard Power Systems 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. 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 Ballard Power Systems' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Ballard Power Systems. Weichai Power Co., Ltd. is currently the company's largest shareholder with 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.1% and 2.4%, of the shares outstanding, respectively.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Ballard Power Systems
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our data suggests that insiders own under 1% of Ballard Power Systems Inc. in their own names. It appears that the board holds about CA$2.4m worth of stock. This compares to a market capitalization of CA$1.3b. 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
The general public, who are usually individual investors, hold a substantial 59% stake in Ballard Power Systems, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Public Company Ownership
We can see that public companies hold 15% of the Ballard Power Systems shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
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 instance, we've identified 1 warning sign for Ballard Power Systems that you should be aware of.
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.
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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.
