While institutions invested in Major Drilling Group International Inc. (TSE:MDI) benefited from last week's 16% gain, retail investors stood to gain the most

Key Insights

• The considerable ownership by retail investors in Major Drilling Group International indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 39% ownership
• Recent purchases by insiders

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To get a sense of who is truly in control of Major Drilling Group International Inc. (TSE:MDI), it is important to understand the ownership structure of the business. With 60% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that reaped the most benefits after last week’s 16% price gain, institutions also received a 40% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Major Drilling Group International.

See our latest analysis for Major Drilling Group International

What Does The Institutional Ownership Tell Us About Major Drilling Group International?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Major Drilling Group International. 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 Major Drilling Group International, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Major Drilling Group International. FMR LLC is currently the largest shareholder, with 8.7% of shares outstanding. Royce & Associates, LP is the second largest shareholder owning 7.1% of common stock, and Beutel Goodman & Company Ltd. holds about 4.6% of the company stock.

Our studies suggest that the top 25 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 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. 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 Major Drilling Group International

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our information suggests that Major Drilling Group International Inc. insiders own under 1% of the company. It has a market capitalization of just CA$702m, and the board has only CA$2.6m worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 60% stake in Major Drilling Group International, suggesting it is a fairly popular stock. 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 Major Drilling Group International better, we need to consider many other factors. Be aware that Major Drilling Group International is showing 1 warning sign in our investment analysis , you should know about...

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.