Aritzia Inc. (TSE:ATZ) surges 4.3%; retail investors who own 44% shares profited along with institutions
Key Insights
- Significant control over Aritzia by retail investors implies that the general public has more power to influence management and governance-related decisions
- 50% of the business is held by the top 15 shareholders
- Recent sales by insiders
A look at the shareholders of Aritzia Inc. (TSE:ATZ) can tell us which group is most powerful. The group holding the most number of shares in the company, around 44% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).
While retail investors were the group that benefitted the most from last week’s CA$475m market cap gain, institutions too had a 31% share in those profits.
In the chart below, we zoom in on the different ownership groups of Aritzia.
Check out our latest analysis for Aritzia
What Does The Institutional Ownership Tell Us About Aritzia?
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.
As you can see, institutional investors have a fair amount of stake in Aritzia. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Aritzia, (below). Of course, keep in mind that there are other factors to consider, too.
Aritzia is not owned by hedge funds. From our data, we infer that the largest shareholder is Brian Hill (who also holds the title of Top Key Executive) with 17% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 11% and 7.8% of the shares outstanding respectively, FMR LLC and GIC Private Limited are the second and third largest shareholders.
A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
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 Aritzia
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.
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 some circumstances.
Our information suggests that insiders maintain a significant holding in Aritzia Inc.. It has a market capitalization of just CA$11b, and insiders have CA$1.9b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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.