Individual investors own 31% of Mainstreet Equity Corp. (TSE:MEQ) shares but private companies control 41% of the company
Key Insights
Significant control over Mainstreet Equity by private companies implies that the general public has more power to influence management and governance-related decisions
52% of the business is held by the top 3 shareholders
To get a sense of who is truly in control of Mainstreet Equity Corp. (TSE:MEQ), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, individual investors make up 31% of the company’s shareholders.
Let's delve deeper into each type of owner of Mainstreet Equity, beginning with the chart below.
Check out our latest analysis for Mainstreet Equity
What Does The Institutional Ownership Tell Us About Mainstreet Equity?
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.
As you can see, institutional investors have a fair amount of stake in Mainstreet Equity. 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 Mainstreet Equity's historic earnings and revenue below, but keep in mind there's always more to the story.
Mainstreet Equity is not owned by hedge funds. Our data shows that Pan Pacific Mercantile Group Inc. is the largest shareholder with 41% of shares outstanding. With 6.0% and 5.4% of the shares outstanding respectively, Mawer Investment Management Ltd. and Navjeet Dhillon are the second and third largest shareholders. Navjeet Dhillon, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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 Mainstreet Equity
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.
We can see that insiders own shares in Mainstreet Equity Corp.. As individuals, the insiders collectively own CA$103m worth of the CA$1.3b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mainstreet Equity. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 41%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 4 warning signs we've spotted with Mainstreet Equity (including 2 which can't be ignored) .
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.
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.
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