Canada markets closed
  • S&P/TSX

    20,532.18
    +148.43 (+0.73%)
     
  • S&P 500

    4,057.84
    +79.11 (+1.99%)
     
  • DOW

    32,637.19
    +516.91 (+1.61%)
     
  • CAD/USD

    0.7830
    +0.0026 (+0.34%)
     
  • CRUDE OIL

    114.34
    +4.01 (+3.63%)
     
  • BTC-CAD

    37,676.36
    -573.68 (-1.50%)
     
  • CMC Crypto 200

    642.36
    -18.78 (-2.84%)
     
  • GOLD FUTURES

    1,848.90
    +2.60 (+0.14%)
     
  • RUSSELL 2000

    1,838.24
    +39.07 (+2.17%)
     
  • 10-Yr Bond

    2.7560
    +0.0070 (+0.25%)
     
  • NASDAQ futures

    12,258.75
    +316.50 (+2.65%)
     
  • VOLATILITY

    27.50
    -0.87 (-3.07%)
     
  • FTSE

    7,564.92
    +42.17 (+0.56%)
     
  • NIKKEI 225

    26,604.84
    -72.96 (-0.27%)
     
  • CAD/EUR

    0.7298
    -0.0004 (-0.05%)
     

What You Need To Know About MEG Energy Corp.'s (TSE:MEG) Investor Composition

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Every investor in MEG Energy Corp. (TSE:MEG) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

MEG Energy has a market capitalization of CA$3.9b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about MEG Energy.

Check out our latest analysis for MEG Energy

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About MEG Energy?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that MEG Energy does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 MEG Energy's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

MEG Energy is not owned by hedge funds. Our data shows that FMR LLC is the largest shareholder with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.3% and 3.6% of the 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.

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

Insider Ownership Of MEG Energy

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.

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 MEG Energy Corp. insiders own under 1% of the company. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CA$31m worth of shares. 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 60% 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. Be aware that MEG Energy is showing 3 warning signs in our investment analysis , and 1 of those is concerning...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting