Stock Analysis

What Kind Of Investors Own Most Of The Keg Royalties Income Fund (TSE:KEG.UN)?

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TSX:KEG.UN
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If you want to know who really controls The Keg Royalties Income Fund (TSE:KEG.UN), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of CA$156m, Keg Royalties Income Fund 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. Let's take a closer look to see what the different types of shareholders can tell us about Keg Royalties Income Fund.

Check out our latest analysis for Keg Royalties Income Fund

ownership-breakdown
TSX:KEG.UN Ownership Breakdown March 15th 2021

What Does The Institutional Ownership Tell Us About Keg Royalties Income Fund?

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.

We can see that Keg Royalties Income Fund 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Keg Royalties Income Fund, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
TSX:KEG.UN Earnings and Revenue Growth March 15th 2021

We note that hedge funds don't have a meaningful investment in Keg Royalties Income Fund. Keg Restaurants Ltd. is currently the company's largest shareholder with 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 2.2% of the stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Keg Royalties Income Fund

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 The Keg Royalties Income Fund insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just CA$156m, and the board has only CA$1.0m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 49% ownership, the general public have some degree of sway over Keg Royalties Income Fund. 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 Company Ownership

We can see that Private Companies own 32%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Keg Royalties Income Fund better, we need to consider many other factors. Take risks for example - Keg Royalties Income Fund has 1 warning sign we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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