Stock Analysis

Evertz Technologies Limited (TSE:ET) insiders still own 64% despite recent sales, but recent decline may have cost them

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Key Insights

  • Insiders appear to have a vested interest in Evertz Technologies' growth, as seen by their sizeable ownership
  • 63% of the business is held by the top 2 shareholders
  • Insiders have sold recently

A look at the shareholders of Evertz Technologies Limited (TSE:ET) can tell us which group is most powerful. The group holding the most number of shares in the company, around 64% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And our data suggests that insiders own the top position in the company’s share registry despite recent sales. As market cap fell to CA$804m last week, they would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Evertz Technologies, beginning with the chart below.

View our latest analysis for Evertz Technologies

TSX:ET Ownership Breakdown March 16th 2023

What Does The Institutional Ownership Tell Us About Evertz Technologies?

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.

Evertz Technologies already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Evertz Technologies' earnings history below. Of course, the future is what really matters.

TSX:ET Earnings and Revenue Growth March 16th 2023

Hedge funds don't have many shares in Evertz Technologies. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Evertz Technologies' case, its Chief Administrative Officer, Douglas DeBruin, is the largest shareholder, holding 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 32% and 1.6% of the stock. Interestingly, the second-largest shareholder, Romolo Magarelli is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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

Insider Ownership Of Evertz Technologies

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.

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.

It seems that insiders own more than half the Evertz Technologies Limited stock. This gives them a lot of power. That means they own CA$519m worth of shares in the CA$804m company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Evertz Technologies better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Evertz Technologies you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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