Yahoo Finance Who Are The Top Investors In Quorum Information Technologies Inc (CVE:QIS)?
Today, I will be analyzing Quorum Information Technologies Inc’s (CVE:QIS) recent ownership structure, an important but not-so-popular subject among individual investors. Ownership structure has been found to have an impact on shareholder returns in both short- and long-term. If an activist institution invests the same amount of capital in a stock as a passive long-term pension fund, the implications are potentially different for key corporate financing decisions such as the use of excess cash or the source of financing. While these are more of a long-term investor’s concern, short-term investors may find the impact of institutional trading overwhelming enough to lose out on what could be a potential opportunity. Therefore, I will take a look at QIS’s shareholders in more detail.
View our latest analysis for Quorum Information Technologies
Institutional Ownership
Due to the big order sizes of institutional investors, a company’s shares can experience large, one-sided momentum, driven by high volume of shares removed from, or injected into, the market. With a not-so-big institutional ownership of 9.5%, QIS is not too exposed to price volatility that may arise from institutional trading. Another important owner type is hedge funds, who tend to be investors with short-term horizons. With 17.7% ownership in QIS, they seem to have a significant enough holding to cause a spike in volatility in the short run. However, I would explore its ownership registry in more detail to check how other ownership types affect its investment case for the long-term investor.
Insider Ownership
Insiders form a group of important ownership types as they manage the company’s operations and decide the best use of capital. Insider ownership has been linked to better alignment between management and shareholders. A major group of owners of QIS is individual insiders, sitting with a hefty 10.5% stake in the company. Broadly, insider ownership of this level has been found to negatively affect companies with consistently low PE ratio (underperforming). And a positive impact has been seen on companies with a high PE ratio (outperforming). It’s also interesting to learn what QIS insiders have been doing with their shareholdings lately. Insider buying may be a sign of upbeat future expectations, however, selling doesn’t necessarily mean the opposite as insiders may be motivated by their personal financial needs.
General Public Ownership
A big stake of 62.3% in QIS is held by the general public. With this size of ownership, retail investors can collectively play a role in major company policies that affect shareholders returns, including executive remuneration and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.
Next Steps:
While QIS has a low level of institutional ownership, active hedge funds still hold a significant stake in the company. Their ownership is a non-fundamental factor, which can impact QIS’s price volatility in the short-term, considering this group investors may come under pressure to deliver in the short term. An investment in QIS should come with enough margin of safety in order to avoid significant dips in shareholding value. However, if you are building an investment case for QIS, ownership structure alone should not dictate your decision to buy or sell the stock. Rather, you should be examining fundamental factors such as Quorum Information Technologies’s past track record and financial health. I urge you to complete your research by taking a look at the following:
Future Outlook: What are well-informed industry analysts predicting for QIS’s future growth? Take a look at our free research report of analyst consensus for QIS’s outlook.
Past Track Record: Has QIS been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of QIS’s historicals for more clarity.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
