Could The Westshore Terminals Investment Corporation (TSE:WTE) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
April 13, 2022
TSX:WTE
Source: Shutterstock

A look at the shareholders of Westshore Terminals Investment Corporation (TSE:WTE) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Westshore Terminals Investment isn't enormous, but it's not particularly small either. It has a market capitalization of CA$2.2b, which means it would generally expect to see some institutions on the share registry. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Westshore Terminals Investment.

See our latest analysis for Westshore Terminals Investment

ownership-breakdown
TSX:WTE Ownership Breakdown April 13th 2022

What Does The Institutional Ownership Tell Us About Westshore Terminals Investment?

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 Westshore Terminals Investment. 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 Westshore Terminals Investment's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TSX:WTE Earnings and Revenue Growth April 13th 2022

Hedge funds don't have many shares in Westshore Terminals Investment. Looking at our data, we can see that the largest shareholder is James Pattison with 16% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 6.3% by the third-largest shareholder.

After doing some more digging, we found that the top 16 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 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 Westshore Terminals Investment

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Westshore Terminals Investment Corporation. It has a market capitalization of just CA$2.2b, and insiders have CA$364m worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Westshore Terminals Investment. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for Westshore Terminals Investment 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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