Retail investors among Stelco Holdings Inc.'s (TSE:STLC) largest shareholders, saw gain in holdings value after stock jumped 3.8% last week
Key Insights
Significant control over Stelco Holdings by retail investors implies that the general public has more power to influence management and governance-related decisions
53% of the business is held by the top 5 shareholders
To get a sense of who is truly in control of Stelco Holdings Inc. (TSE:STLC), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Clearly, retail investors benefitted the most after the company's market cap rose by CA$83m last week.
Let's delve deeper into each type of owner of Stelco Holdings, beginning with the chart below.
Check out our latest analysis for Stelco Holdings
What Does The Institutional Ownership Tell Us About Stelco Holdings?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Stelco Holdings. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Stelco Holdings' earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Stelco Holdings. Fairfax Financial Holdings Limited is currently the company's largest shareholder with 22% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 16% and 7.4%, of the shares outstanding, respectively. Alan Kestenbaum, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
Our research also brought to light the fact that roughly 53% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
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 Stelco Holdings
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.
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.
It seems insiders own a significant proportion of Stelco Holdings Inc.. Insiders own CA$358m worth of shares in the CA$2.3b company. That's quite meaningful. 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
The general public-- including retail investors -- own 36% stake in the company, and hence can't easily be ignored. 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.
Private Company Ownership
We can see that Private Companies own 6.5%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Public Company Ownership
We can see that public companies hold 22% of the Stelco Holdings shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
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. Case in point: We've spotted 2 warning signs for Stelco Holdings you should be aware of.
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.
