SIR Royalty Income Fund's (TSE:SRV.UN) top owners are retail investors with 49% stake, while 31% is held by private companies
Key Insights
Significant control over SIR Royalty Income Fund by retail investors implies that the general public has more power to influence management and governance-related decisions
The top 8 shareholders own 50% of the company
13% of SIR Royalty Income Fund is held by insiders
If you want to know who really controls SIR Royalty Income Fund (TSE:SRV.UN), 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 49% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, private companies make up 31% of the company’s shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about SIR Royalty Income Fund.
Check out our latest analysis for SIR Royalty Income Fund
What Does The Institutional Ownership Tell Us About SIR Royalty Income Fund?
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.
Since institutions own only a small portion of SIR Royalty Income Fund, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. 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.
Hedge funds don't have many shares in SIR Royalty Income Fund. Our data shows that SIR Corp. is the largest shareholder with 15% of shares outstanding. Lembit Janes is the second largest shareholder owning 12% of common stock, and The Estate William Fredrick Irvine holds about 10% of the company stock.
We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of SIR Royalty Income Fund
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of SIR Royalty Income Fund. Insiders own CA$20m worth of shares in the CA$156m 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
The general public-- including retail investors -- own 49% 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 Equity Ownership
Private equity firms hold a 5.0% stake in SIR Royalty Income Fund. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Private Company Ownership
It seems that Private Companies own 31%, of the SIR Royalty Income Fund stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for SIR Royalty Income Fund that you should be aware of.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
