A2Z Smart Technologies Corp.'s (CVE:AZ) market cap dropped CA$32m last week; Individual investors bore the brunt

By
Simply Wall St
Published
February 23, 2022
TSXV:AZ
Source: Shutterstock

Every investor in A2Z Smart Technologies Corp. (CVE:AZ) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 15% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 41% stock also took a hit.

Let's delve deeper into each type of owner of A2Z Smart Technologies, beginning with the chart below.

Check out our latest analysis for A2Z Smart Technologies

ownership-breakdown
TSXV:AZ Ownership Breakdown February 23rd 2022

What Does The Lack Of Institutional Ownership Tell Us About A2Z Smart Technologies?

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 are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. 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 A2Z Smart Technologies, for yourself, below.

earnings-and-revenue-growth
TSXV:AZ Earnings and Revenue Growth February 23rd 2022

We note that hedge funds don't have a meaningful investment in A2Z Smart Technologies. With a 41% stake, CEO Bentsur Joseph is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 0.4% and 0.02%, of the shares outstanding, respectively.

Our studies suggest that the top 5 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of A2Z Smart Technologies

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.

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.

It seems insiders own a significant proportion of A2Z Smart Technologies Corp.. Insiders have a CA$74m stake in this CA$182m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 59% of A2Z Smart Technologies. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand A2Z Smart Technologies better, we need to consider many other factors. Case in point: We've spotted 6 warning signs for A2Z Smart Technologies you should be aware of, and 2 of them don't sit too well with us.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.