Individual investors account for 52% of MEG Energy Corp.'s (TSE:MEG) ownership, while institutions account for 47%

editorial-team@simplywallst.com (Simply Wall St)

Thu, Oct 31, 2024, 10:45 AM 4 min read

To get a sense of who is truly in control of MEG Energy Corp. (TSE:MEG), it is important to understand the ownership structure of the business. With 52% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutions, on the other hand, account for 47% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

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

See our latest analysis for MEG Energy

ownership-breakdown — TSX:MEG Ownership Breakdown October 31st 2024

What Does The Institutional Ownership Tell Us About MEG Energy?

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 MEG Energy does have institutional investors; and they hold a good portion of the company's stock. 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. 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 MEG Energy's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — TSX:MEG Earnings and Revenue Growth October 31st 2024

Hedge funds don't have many shares in MEG Energy. FMR LLC is currently the largest shareholder, with 11% of shares outstanding. Capital Research and Management Company is the second largest shareholder owning 9.4% of common stock, and The Vanguard Group, Inc. holds about 3.8% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of MEG Energy

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of MEG Energy Corp. in their own names. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CA$27m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 52% of MEG Energy shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand MEG Energy better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with MEG Energy .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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In This Article:

Key Insights

What Does The Institutional Ownership Tell Us About MEG Energy?

Insider Ownership Of MEG Energy

General Public Ownership

Next Steps:

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