The considerable ownership by individual investors in CES Energy Solutions indicates that they collectively have a greater say in management and business strategy
38% of the business is held by the top 25 shareholders
To get a sense of who is truly in control of CES Energy Solutions Corp. (TSE:CEU), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 59% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Following a 6.1% increase in the stock price last week, individual investors profited the most, but institutions who own 38% stock also stood to gain from the increase.
Let's delve deeper into each type of owner of CES Energy Solutions, beginning with the chart below.
What Does The Institutional Ownership Tell Us About CES Energy Solutions?
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.
CES Energy Solutions already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 CES Energy Solutions' historic earnings and revenue below, but keep in mind there's always more to the story.
TSX:CEU Earnings and Revenue Growth November 4th 2024
We note that hedge funds don't have a meaningful investment in CES Energy Solutions. Looking at our data, we can see that the largest shareholder is EdgePoint Investment Group Inc. with 15% of shares outstanding. With 3.6% and 3.4% of the shares outstanding respectively, FMR LLC and Dimensional Fund Advisors LP are the second and third largest shareholders. In addition, we found that Kenneth Zinger, the CEO has 0.9% of the shares allocated to their name.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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 CES Energy Solutions
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
We can report that insiders do own shares in CES Energy Solutions Corp.. This is a big company, so it is good to see this level of alignment. Insiders own CA$65m 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
The general public, mostly comprising of individual investors, collectively holds 59% of CES Energy Solutions shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with CES Energy Solutions , and understanding them should be part of your investment process.
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.
