Significant control over ATCO by individual investors implies that the general public has more power to influence management and governance-related decisions
To get a sense of who is truly in control of ATCO Ltd. (TSE:ACO.X), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And private companies on the other hand have a 34% ownership in the company.
Let's take a closer look to see what the different types of shareholders can tell us about ATCO.
What Does The Institutional Ownership Tell Us About ATCO?
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.
As you can see, institutional investors have a fair amount of stake in ATCO. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 ATCO's historic earnings and revenue below, but keep in mind there's always more to the story.
TSX:ACO.X Earnings and Revenue Growth October 28th 2024
Hedge funds don't have many shares in ATCO. Our data shows that Sentgraf Enterprises Ltd. is the largest shareholder with 34% of shares outstanding. With 6.3% and 2.6% of the shares outstanding respectively, RBC Global Asset Management Inc. and BlackRock, Inc. are the second and third largest shareholders. In addition, we found that Nancy Southern, the CEO has 0.6% of the shares allocated to their name.
We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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 ATCO
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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.
Shareholders would probably be interested to learn that insiders own shares in ATCO Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CA$71m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over ATCO. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
We can see that Private Companies own 34%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for ATCO you should know about.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
