Is Bird Construction Inc. (TSE:BDT) Popular Amongst Institutions?

By
Simply Wall St
Published
November 22, 2020
TSX:BDT
Source: Shutterstock

If you want to know who really controls Bird Construction Inc. (TSE:BDT), 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.

With a market capitalization of CA$364m, Bird Construction 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 own shares in the company. We can zoom in on the different ownership groups, to learn more about Bird Construction.

Check out our latest analysis for Bird Construction

ownership-breakdown
TSX:BDT Ownership Breakdown November 23rd 2020

What Does The Institutional Ownership Tell Us About Bird Construction?

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.

Bird Construction already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Bird Construction's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
TSX:BDT Earnings and Revenue Growth November 22nd 2020

Bird Construction is not owned by hedge funds. The company's largest shareholder is Canso Investment Counsel Ltd., with ownership of 19%. Meanwhile, the second and third largest shareholders, hold 9.9% and 5.6%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Bird Construction

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Bird Construction Inc.. It has a market capitalization of just CA$364m, and insiders have CA$8.5m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- mostly retail investors -- own 51% of Bird Construction. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bird Construction better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Bird Construction you should be aware of, and 2 of them can't be ignored.

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.

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