Do Directors Own Canadian Apartment Properties Real Estate Investment Trust (TSE:CAR.UN) Shares?

If you want to know who really controls Canadian Apartment Properties Real Estate Investment Trust (TSE:CAR.UN), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

Canadian Apartment Properties Real Estate Investment Trust is a pretty big company. It has a market capitalization of CA$8.4b. Normally institutions would own a significant portion of a company this size. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about CAR.UN.

Check out our latest analysis for Canadian Apartment Properties Real Estate Investment Trust

TSX:CAR.UN Ownership Summary, September 16th 2019
TSX:CAR.UN Ownership Summary, September 16th 2019

What Does The Institutional Ownership Tell Us About Canadian Apartment Properties Real Estate Investment Trust?

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.

Canadian Apartment Properties Real Estate Investment Trust already has institutions on the share registry. Indeed, they own 30% of the company. 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 Canadian Apartment Properties Real Estate Investment Trust’s historic earnings and revenue, below, but keep in mind there’s always more to the story.

TSX:CAR.UN Income Statement, September 16th 2019
TSX:CAR.UN Income Statement, September 16th 2019

We note that hedge funds don’t have a meaningful investment in Canadian Apartment Properties Real Estate Investment Trust. 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 Canadian Apartment Properties Real Estate Investment Trust

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.

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 less than 1% of Canadian Apartment Properties Real Estate Investment Trust. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CA$46m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public — mostly retail investors — own 69% of Canadian Apartment Properties Real Estate Investment Trust. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Canadian Apartment Properties Real Estate Investment Trust better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.