Every investor in Exchange Income Corporation (TSE:EIF) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.
With a market capitalization of CA$1.3b, Exchange Income is a decent size, so it is probably on the radar of institutional investors. 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 Exchange Income.
What Does The Institutional Ownership Tell Us About Exchange Income?
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.
Exchange Income already has institutions on the share registry. Indeed, they own 6.9% of 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Exchange Income’s earnings history, below. Of course, the future is what really matters.
We note that hedge funds don’t have a meaningful investment in Exchange Income. McIntosh Properties Ltd. is currently the largest shareholder, with 4.8% of shares outstanding. BlackRock, Inc. is the second largest shareholder with 1.5% of common stock, followed by Gary Buckley, holding 1.1% of the stock. Gary Buckley also happens to hold the title of Member of the Board of Directors.
Our studies suggest that the top 25 shareholders collectively control less than 50% 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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Exchange Income
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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…
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