Calfrac Well Services Ltd.'s (TSE:CFW) top owners are individual investors with 35% stake, while 35% is held by private companies
Key Insights
The considerable ownership by individual investors in Calfrac Well Services indicates that they collectively have a greater say in management and business strategy
The top 3 shareholders own 53% of the company
To get a sense of who is truly in control of Calfrac Well Services Ltd. (TSE:CFW), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 35% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Private companies, on the other hand, account for 35% of the company's stockholders.
Let's take a closer look to see what the different types of shareholders can tell us about Calfrac Well Services.
See our latest analysis for Calfrac Well Services
What Does The Institutional Ownership Tell Us About Calfrac Well Services?
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.
We can see that Calfrac Well Services does have institutional investors; and they hold a good portion of the company's stock. 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 Calfrac Well Services' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Calfrac Well Services. G2S2 Capital Inc. is currently the largest shareholder, with 35% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 7.0%, of the shares outstanding, respectively. Ronald Mathison, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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 Calfrac Well Services
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 Calfrac Well Services Ltd.. Insiders have a CA$54m stake in this CA$439m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 35% stake in Calfrac Well Services. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
We can see that Private Companies own 35%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Calfrac Well Services better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Calfrac Well Services (of which 2 are concerning!) you should know about.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
