Stock Analysis

What Percentage Of Tecsys Inc. (TSE:TCS) Shares Do Insiders Own?

TSX:TCS
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The big shareholder groups in Tecsys Inc. (TSE:TCS) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.

Tecsys is a smaller company with a market capitalization of CA$698m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Tecsys.

View our latest analysis for Tecsys

ownership-breakdown
TSX:TCS Ownership Breakdown March 16th 2021

What Does The Institutional Ownership Tell Us About Tecsys?

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.

Tecsys already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Tecsys' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TSX:TCS Earnings and Revenue Growth March 16th 2021

Hedge funds don't have many shares in Tecsys. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Tecsys' case, its Top Key Executive, David Brereton, is the largest shareholder, holding 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.9% and 5.2% of the stock. In addition, we found that Peter Brereton, the CEO has 2.2% of the shares allocated to their name.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Tecsys

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Tecsys Inc.. Insiders own CA$148m worth of shares in the CA$698m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are mostly retail investors, collectively hold 54% of Tecsys shares. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Tecsys better, we need to consider many other factors. Be aware that Tecsys is showing 3 warning signs in our investment analysis , you should know about...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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