Retail investors account for 32% of ECN Capital Corp.'s (TSE:ECN) ownership, while hedge funds account for 26%
Key Insights
Significant control over ECN Capital by retail investors implies that the general public has more power to influence management and governance-related decisions
The top 5 shareholders own 54% of the company
Recent purchases by insiders
To get a sense of who is truly in control of ECN Capital Corp. (TSE:ECN), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 32% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, hedge funds make up 26% of the company’s shareholders.
In the chart below, we zoom in on the different ownership groups of ECN Capital.
Check out our latest analysis for ECN Capital
What Does The Institutional Ownership Tell Us About ECN Capital?
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 ECN Capital. 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 ECN Capital, (below). Of course, keep in mind that there are other factors to consider, too.
Our data indicates that hedge funds own 26% of ECN Capital. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Looking at our data, we can see that the largest shareholder is North Peak Capital Management, LLC with 15% of shares outstanding. Skyline Champion Corporation is the second largest shareholder owning 12% of common stock, and Voss Capital, LLC holds about 11% of the company stock. In addition, we found that Steven Hudson, the CEO has 5.3% of the shares allocated to their name.
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.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of ECN Capital
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. 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.
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 most recent data indicates that insiders own some shares in ECN Capital Corp.. In their own names, insiders own CA$55m worth of stock in the CA$795m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 32% stake in ECN Capital. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Public Company Ownership
We can see that public companies hold 12% of the ECN Capital shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with ECN Capital (at least 1 which is concerning) , and understanding them should be part of your investment process.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
