What Is The Ownership Structure Like For Savaria Corporation (TSE:SIS)?

By
Simply Wall St
Published
June 08, 2021
TSX:SIS
Source: Shutterstock

A look at the shareholders of Savaria Corporation (TSE:SIS) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. 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.

With a market capitalization of CA$1.3b, Savaria is a decent size, so it is probably on the radar of institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Savaria.

Check out our latest analysis for Savaria

ownership-breakdown
TSX:SIS Ownership Breakdown June 9th 2021

What Does The Institutional Ownership Tell Us About Savaria?

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 Savaria does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Savaria's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
TSX:SIS Earnings and Revenue Growth June 9th 2021

We note that hedge funds don't have a meaningful investment in Savaria. The company's CEO Marcel Bourassa is the largest shareholder with 21% of shares outstanding. With 7.9% and 2.0% of the shares outstanding respectively, Mawer Investment Management Limited and Jean-Marie Bourassa are the second and third largest shareholders. Interestingly, the third-largest shareholder, Jean-Marie Bourassa is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Savaria

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Savaria Corporation. It has a market capitalization of just CA$1.3b, and insiders have CA$311m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public holds a substantial 57% stake in Savaria, suggesting it is a fairly popular stock. With this amount 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 vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Savaria has 4 warning signs (and 1 which is concerning) we think you should know about.

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.

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