To get a sense of who is truly in control of Major Drilling Group International Inc. (TSE:MDI), it is important to understand the ownership structure of the business. With 61% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutional investors would probably welcome last week’s 16% increase in share prices after a year of 8.3% losses as a sign that returns are likely to begin trending higher.
In the chart below, we zoom in on the different ownership groups of Major Drilling Group International.
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What Does The Institutional Ownership Tell Us About Major Drilling Group International?
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.
As you can see, institutional investors have a fair amount of stake in Major Drilling Group International. 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 Major Drilling Group International’s earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don’t have a meaningful investment in Major Drilling Group International. The company’s largest shareholder is FMR LLC, with ownership of 15%. In comparison, the second and third largest shareholders hold about 11% and 8.4% of the stock.
On further inspection, we found that more than half the company’s shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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 Major Drilling Group International
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 most recent data indicates that insiders own less than 1% of Major Drilling Group International Inc.. It appears that the board holds about CA$6.1m worth of stock. This compares to a market capitalization of CA$732m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 27% stake in Major Drilling Group International. 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 Equity Ownership
With a stake of 11%, private equity firms could influence the Major Drilling Group International board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
It’s always worth thinking about the different groups who own shares in a company. But to understand Major Drilling Group International better, we need to consider many other factors. Case in point: We’ve spotted 1 warning sign for Major Drilling Group International you should be aware of.
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.
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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.