Do Insiders Own Lots Of Shares In Accord Financial Corp. (TSE:ACD)?

Every investor in Accord Financial Corp. (TSE:ACD) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of CA$79m, Accord Financial is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don’t own shares in the company. We can zoom in on the different ownership groups, to learn more about ACD.

View our latest analysis for Accord Financial

TSX:ACD Ownership Summary, December 13th 2019
TSX:ACD Ownership Summary, December 13th 2019

What Does The Lack Of Institutional Ownership Tell Us About Accord Financial?

We don’t tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it’s not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Accord Financial, for yourself, below.

TSX:ACD Income Statement, December 13th 2019
TSX:ACD Income Statement, December 13th 2019

Hedge funds don’t have many shares in Accord Financial. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Accord Financial

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.

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 some shares in Accord Financial Corp.. As individuals, the insiders collectively own CA$4.8m worth of the CA$79m company. Ownership is clearly an important issue when it comes to investment selection. But ultimately, many risks exist within the business itself, rather than its shareholders. For example, we’ve discovered 2 warning signs for Accord Financial (of which 1 is major) which any shareholder or potential investor should be aware of.

General Public Ownership

The general public holds a 36% stake in ACD. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 58%, of the ACD stock. 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.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Accord Financial better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

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.

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