Morguard Corporation (TSE:MRC) insiders have significant skin in the game with 63% ownership
Key Insights
Morguard's significant insider ownership suggests inherent interests in company's expansion
Kuldip Sahi owns 62% of the company
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
Every investor in Morguard Corporation (TSE:MRC) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 63% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
So, insiders of Morguard have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.
Let's take a closer look to see what the different types of shareholders can tell us about Morguard.
See our latest analysis for Morguard
What Does The Institutional Ownership Tell Us About Morguard?
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.
Institutions have a very small stake in Morguard. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Morguard. With a 62% stake, CEO Kuldip Sahi is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. Meanwhile, the second and third largest shareholders, hold 10% and 0.8%, of the shares outstanding, respectively.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Morguard
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.
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 information suggests that insiders own more than half of Morguard Corporation. This gives them effective control of the company. Given it has a market cap of CA$1.1b, that means they have CA$707m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
General Public Ownership
With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Morguard. 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
We can see that Private Companies own 10%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
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 be aware of the 2 warning signs we've spotted with Morguard .
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
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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.
