Yahoo Finance Painful week for retail investors invested in Cargojet Inc. (TSE:CJT) after 5.2% drop, institutions also suffered losses
Key Insights
The considerable ownership by retail investors in Cargojet indicates that they collectively have a greater say in management and business strategy
The top 25 shareholders own 43% of the company
Every investor in Cargojet Inc. (TSE:CJT) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While institutions, who own 44% shares weren’t spared from last week’s CA$114m market cap drop, retail investors as a group suffered the maximum losses
In the chart below, we zoom in on the different ownership groups of Cargojet.
Check out our latest analysis for Cargojet
What Does The Institutional Ownership Tell Us About Cargojet?
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.
Cargojet 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 Cargojet's historic earnings and revenue below, but keep in mind there's always more to the story.
Cargojet is not owned by hedge funds. The company's largest shareholder is RBC Dominion Securities Inc., Asset Management Arm, with ownership of 14%. With 3.1% and 2.5% of the shares outstanding respectively, CI Global Asset Management and CIBC Asset Management Inc. are the second and third largest shareholders. In addition, we found that Ajay Virmani, the CEO has 2.4% of the shares allocated to their name.
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 Cargojet
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 see that insiders own shares in Cargojet Inc.. The insiders have a meaningful stake worth CA$58m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 54% stake in Cargojet, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Cargojet better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Cargojet (including 2 which are significant) .
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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