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Do Institutions Own AutoCanada Inc. (TSE:ACQ) Shares?

Simply Wall St

Every investor in AutoCanada Inc. (TSE:ACQ) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

AutoCanada is a smaller company with a market capitalization of CA$287m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about ACQ.

Check out our latest analysis for AutoCanada

TSX:ACQ Ownership Summary, November 12th 2019

What Does The Institutional Ownership Tell Us About AutoCanada?

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 own 40% of AutoCanada. 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. 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 AutoCanada, (below). Of course, keep in mind that there are other factors to consider, too.

TSX:ACQ Income Statement, November 12th 2019

It would appear that 13% of AutoCanada shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of AutoCanada

The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 AutoCanada Inc. in their own names. It appears that the board holds about CA$939k worth of stock. This compares to a market capitalization of CA$287m. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 47% stake in ACQ. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.