Painful week for individual investors invested in Sangoma Technologies Corporation (TSE:STC) after 14% drop, institutions also suffered losses
Key Insights
The considerable ownership by individual investors in Sangoma Technologies indicates that they collectively have a greater say in management and business strategy
A total of 8 investors have a majority stake in the company with 51% ownership
If you want to know who really controls Sangoma Technologies Corporation (TSE:STC), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 45% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).
While institutions, who own 29% shares weren’t spared from last week’s CA$24m market cap drop, individual investors as a group suffered the maximum losses
Let's take a closer look to see what the different types of shareholders can tell us about Sangoma Technologies.
View our latest analysis for Sangoma Technologies
What Does The Institutional Ownership Tell Us About Sangoma Technologies?
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.
We can see that Sangoma Technologies does have institutional investors; and they hold a good portion of the company's stock. 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 Sangoma Technologies' historic earnings and revenue below, but keep in mind there's always more to the story.
Sangoma Technologies is not owned by hedge funds. From our data, we infer that the largest shareholder is Norman Worthington (who also holds the title of Top Key Executive) with 23% of shares outstanding. Its 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 play the role of a key stakeholder. With 7.9% and 7.3% of the shares outstanding respectively, Mawer Investment Management Ltd. and PenderFund Capital Management Ltd. are the second and third largest shareholders.
On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Sangoma Technologies
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 information suggests that insiders maintain a significant holding in Sangoma Technologies Corporation. Insiders own CA$38m worth of shares in the CA$146m company. 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
With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sangoma Technologies. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Sangoma Technologies better, we need to consider many other factors. Be aware that Sangoma Technologies is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...
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.
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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.
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