The big shareholder groups in GDI Integrated Facility Services Inc. (TSE:GDI) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.
GDI Integrated Facility Services is not a large company by global standards. It has a market capitalization of CA$771m, which means it wouldn’t have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about GDI Integrated Facility Services.
What Does The Institutional Ownership Tell Us About GDI Integrated Facility Services?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that GDI Integrated Facility Services does have institutional investors; and they hold 25% of the stock. 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 GDI Integrated Facility Services’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
GDI Integrated Facility Services is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Birch Hill Equity Partners Management Inc. with 30% of shares outstanding. The second and third largest shareholders are Claude Bigras and Van Berkom and Associates Inc., holding 16% and 9.4%, respectively. Claude Bigras also happens to hold the title of Chief Executive Officer.
Our analysis suggests that the top 3 shareholders collectively control 55% of the company’s shares, implying that they have considerable power to influence the company’s decisions.
Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. 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 GDI Integrated Facility Services
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 a reasonable proportion of GDI Integrated Facility Services Inc.. It has a market capitalization of just CA$771m, and insiders have CA$140m worth of shares in their own names. 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, with a 27% stake in the company, will not 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 30% stake in GDI. 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.
It’s always worth thinking about the different groups who own shares in a company. But to understand GDI Integrated Facility Services better, we need to consider many other factors. Case in point: We’ve spotted 1 warning sign for GDI Integrated Facility Services you should be aware of.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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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