What Type Of Shareholders Make Up Real Matters Inc.'s (TSE:REAL) Share Registry?

By
Simply Wall St
Published
February 20, 2022
TSX:REAL
Source: Shutterstock

If you want to know who really controls Real Matters Inc. (TSE:REAL), 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. 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.

Real Matters is not a large company by global standards. It has a market capitalization of CA$441m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Real Matters.

View our latest analysis for Real Matters

ownership-breakdown
TSX:REAL Ownership Breakdown February 20th 2022

What Does The Institutional Ownership Tell Us About Real Matters?

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.

As you can see, institutional investors have a fair amount of stake in Real Matters. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Real Matters' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
TSX:REAL Earnings and Revenue Growth February 20th 2022

Real Matters is not owned by hedge funds. Our data shows that Burgundy Asset Management Ltd. is the largest shareholder with 11% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.6% and 4.1%, of the shares outstanding, respectively. Jason Smith, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Real Matters

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

We can report that insiders do own shares in Real Matters Inc.. It has a market capitalization of just CA$441m, and insiders have CA$30m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 55% of Real Matters. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Real Matters .

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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