In This Article:
Key Insights
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Insiders appear to have a vested interest in D2L's growth, as seen by their sizeable ownership
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The largest shareholder of the company is John Baker with a 51% stake
Every investor in D2L Inc. (TSE:DTOL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 52% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.
In the chart below, we zoom in on the different ownership groups of D2L.
Check out our latest analysis for D2L
What Does The Institutional Ownership Tell Us About D2L?
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.
We can see that D2L does have institutional investors; and they hold a good portion of the company's stock. 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. 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 D2L's historic earnings and revenue below, but keep in mind there's always more to the story.
D2L is not owned by hedge funds. With a 51% stake, CEO John Baker is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 5.3% by the third-largest shareholder.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of D2L
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.