Significantly high institutional ownership implies Tucows' stock price is sensitive to their trading actions
52% of the business is held by the top 4 shareholders
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in Tucows Inc. (NASDAQ:TCX) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 72% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
After a year of 27% losses, last week’s 16% gain would be welcomed by institutional investors as a possible sign that returns might start trending higher.
Let's delve deeper into each type of owner of Tucows, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Tucows?
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.
Tucows 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Tucows, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqCM:TCX Earnings and Revenue Growth July 14th 2024
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It looks like hedge funds own 8.4% of Tucows shares. 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. EdgePoint Investment Group Inc. is currently the company's largest shareholder with 19% of shares outstanding. Investmentaktiengesellschaft FüR Langfristige Investoren Tgv is the second largest shareholder owning 18% of common stock, and Blacksheep Fund Management Limited holds about 8.4% of the company stock. In addition, we found that Elliot Noss, the CEO has 6.2% of the shares allocated to their name.
On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Tucows
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tucows. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Tucows that you should be aware of.
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.
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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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