The big shareholder groups in FAX Capital Corp. (TSE:FXC) have power over the company. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.
With a market capitalization of CA$183m, FAX Capital is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions are not on the share registry. Let’s take a closer look to see what the different types of shareholders can tell us about FAX Capital.
See our latest analysis for FAX Capital
What Does The Lack Of Institutional Ownership Tell Us About FAX Capital?
Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them. On the same subject : 3 of the Best Canadian Energy Stocks to Buy in 2021 – The Motley Fool Canada.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. FAX Capital’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.
FAX Capital is not owned by hedge funds. Merrilyn Driscol is currently the largest shareholder, with 65% of shares outstanding. This implies that they have majority interest control of the future of the company. Nickolas Lim is the second largest shareholder owning 0.3% of common stock, and Marc Robinson holds about 0.2% of the company stock. Nickolas Lim, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.
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. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of FAX Capital
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. To see also : People are flocking to Applebee’s. This popular song is one reason why – CTV News. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that insiders own more than half of FAX Capital Corp.. This gives them effective control of the company. Given it has a market cap of CA$183m, that means they have CA$120m worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public holds a 35% stake in FAX Capital. This may interest you : Ballard Power Systems’ (TSE:BLDP) Wonderful 726% Share Price Increase Shows How Capitalism Can Build Wealth – Simply Wall St. 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.
It’s always worth thinking about the different groups who own shares in a company. But to understand FAX Capital better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we’ve spotted with FAX Capital .
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
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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