Significant control over E-L Financial by private companies implies that the general public has more power to influence management and governance-related decisions
59% of the business is held by the top 2 shareholders
A look at the shareholders of E-L Financial Corporation Limited (TSE:ELF) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Private companies gained the most after market cap touched CA$4.7b last week, while institutions who own 32% also benefitted.
In the chart below, we zoom in on the different ownership groups of E-L Financial.
What Does The Institutional Ownership Tell Us About E-L Financial?
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 E-L Financial 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 E-L Financial's earnings history below. Of course, the future is what really matters.
TSX:ELF Earnings and Revenue Growth January 21st 2025
We note that hedge funds don't have a meaningful investment in E-L Financial. Dominion and Anglo Investment Corp. Ltd. is currently the company's largest shareholder with 43% of shares outstanding. Canadian & Foreign Securities, Asset Management Arm is the second largest shareholder owning 16% of common stock, and Burgundy Asset Management Ltd. holds about 11% of the company stock.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of E-L Financial
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 E-L Financial Corporation Limited in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. 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$7.8m 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-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. 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
It seems that Private Companies own 43%, of the E-L Financial stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for E-L Financial you should be aware of.
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.
