Yahoo Finance Waterloo Brewing Ltd.'s (TSE:WBR) 11% gain last week benefited both individual investors who own 44% as well as insiders
To get a sense of who is truly in control of Waterloo Brewing Ltd. (TSE:WBR), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Following a 11% increase in the stock price last week, individual investors profited the most, but insiders who own 18% stock also stood to gain from the increase.
Let's take a closer look to see what the different types of shareholders can tell us about Waterloo Brewing.
See our latest analysis for Waterloo Brewing
What Does The Institutional Ownership Tell Us About Waterloo Brewing?
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.
Waterloo Brewing already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Waterloo Brewing's historic earnings and revenue below, but keep in mind there's always more to the story.
It would appear that 14% of Waterloo Brewing shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Benbrick Holdings Ltd is currently the company's largest shareholder with 17% of shares outstanding. With 14% and 12% of the shares outstanding respectively, Seymour Investment Management Ltd. and Edward Kernaghan are the second and third largest shareholders. Edward Kernaghan, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that George Croft, the CEO has 3.1% of the shares allocated to their name.
We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Waterloo Brewing
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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
Our information suggests that insiders maintain a significant holding in Waterloo Brewing Ltd.. It has a market capitalization of just CA$140m, and insiders have CA$25m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 44% stake in Waterloo Brewing. 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.
Private Company Ownership
Our data indicates that Private Companies hold 17%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Waterloo Brewing better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Waterloo Brewing (at least 2 which are a bit concerning) , and understanding them should be part of your investment process.
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.
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