Is Stingray Group Inc.'s (TSE:RAY.A) Shareholder Ownership Skewed Towards Insiders?

By
Simply Wall St
Published
May 07, 2021
TSX:RAY.A

A look at the shareholders of Stingray Group Inc. (TSE:RAY.A) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Stingray Group is not a large company by global standards. It has a market capitalization of CA$527m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Stingray Group.

Check out our latest analysis for Stingray Group

ownership-breakdown
TSX:RAY.A Ownership Breakdown May 7th 2021

What Does The Institutional Ownership Tell Us About Stingray Group?

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.

We can see that Stingray Group does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Stingray Group's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TSX:RAY.A Earnings and Revenue Growth May 7th 2021

Stingray Group is not owned by hedge funds. Our data shows that Caisse de dépôt et placement du Québec is the largest shareholder with 12% of shares outstanding. 8242003 Canada Inc is the second largest shareholder owning 11% of common stock, and Robert Steele holds about 8.0% of the company stock. Robert Steele, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Eric Boyko, the CEO has 1.7% of the shares allocated to their name.

We did some more digging and found that 7 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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

Insider Ownership Of Stingray Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 insiders maintain a significant holding in Stingray Group Inc.. Insiders own CA$90m worth of shares in the CA$527m company. I 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 holds a 40% stake in Stingray Group. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 24%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Stingray Group better, we need to consider many other factors. Take risks for example - Stingray Group has 3 warning signs we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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