Institutional investors may adopt severe steps after Canada Goose Holdings Inc.'s (TSE:GOOS) latest 6.5% drop adds to a year losses
Key Insights
Significantly high institutional ownership implies Canada Goose Holdings' stock price is sensitive to their trading actions
The top 5 shareholders own 53% of the company
A look at the shareholders of Canada Goose Holdings Inc. (TSE:GOOS) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And so it follows that institutional investors was the group most impacted after the company's market cap fell to CA$2.7b last week after a 6.5% drop in the share price. The recent loss, which adds to a one-year loss of 21% for stockholders, may not sit well with this group of investors. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the downtrend continues, institutions may face pressures to sell Canada Goose Holdings, which might have negative implications on individual investors.
Let's delve deeper into each type of owner of Canada Goose Holdings, beginning with the chart below.
View our latest analysis for Canada Goose Holdings
What Does The Institutional Ownership Tell Us About Canada Goose Holdings?
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.
Canada Goose Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Canada Goose Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
Canada Goose Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Dani Reiss with 19% of shares outstanding. For context, the second largest shareholder holds about 19% of the shares outstanding, followed by an ownership of 6.7% by the third-largest shareholder.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Canada Goose Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that insiders maintain a significant holding in Canada Goose Holdings Inc.. It has a market capitalization of just CA$2.7b, and insiders have CA$518m worth of shares in their own names. That's quite significant. 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
With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Canada Goose Holdings. 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.
Private Equity Ownership
With a stake of 19%, private equity firms could influence the Canada Goose Holdings board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Canada Goose Holdings 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.
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