In this analysis I will focus on developing a perspective on the latest ownership structure of the Canadian property investment funds ( TSE: REF.UN ), a less discussed but important factor.
The ownership structure of a company often depends on its performance on shares, both in the long and the short term.
The effect of an active institutional investor with a similar ownership as a passive pension fund can vary enormously in the corporate governance of a company and the accountability to the shareholders. While this may be more interesting for long-term investors, short-term investors can also benefit by paying attention to when these institutions act to take advantage of the increased volatility.
Now I will analyze the shareholders register of REF.UN in more detail.
Institutions account for 46.52% of the outstanding shares of REF.UN, a sufficiently strong position to move stock prices when they start buying and selling in large quantities, especially when there are relatively small amounts of shares available on the market to trade.
Because not all institutions are the same, such events with high volatility, especially in the short term, are more often linked to active market participants such as hedge funds.
For shareholders in REF.UN, sharp price movements may not be a major problem, since active hedge funds hold a relatively small stake in the company. Although this does not necessarily lead to high short-term volatility, we need to go deeper into REF.UN's ownership structure to discover how the remaining owner types can influence their investment profile.
Insiders form a group of important forms of ownership when they manage the business activities and decide on the best use of capital. Insider ownership is linked to better coordination between management and shareholders.
REF.UN insiders may only hold a 1.34% stake in the company, but this is a relatively important holding company as it is a large-cap share. A higher level of insider ownership is linked to management that is executed on high-return projects instead of expansion projects because of apparent growth.
I will also be happy to check what insiders have recently done with their company. Insider buying can be a sign of optimistic expectations for the future, but selling does not necessarily mean the opposite, because insiders can be motivated by their personal financial needs.
General public property
The general public holds a substantial 52.14% stake in REF.UN, making it a very popular stock exchange among private investors.
This property size gives private investors collective power when making decisions about important policy decisions such as directors 'fees, directors' appointments and business takeovers.
REF.UN & # 39; s considerably high level of institutional ownership requires further analysis of the safety margin.
This is to prevent you from becoming entangled in a sustained sale that is often observed in stocks with this level of institutional participation.
if you are drafting an investment case for REF.UN, the ownership structure may not determine your decision to buy or sell the shares.
Instead, you should evaluate company-specific factors
Reliability of the Canadian Real Estate Investment Trust in the past and financial health.
to complete your research by looking at the following:
- Financial health : Are the operations of REF.UN financially sustainable? Balance sheets can be difficult to analyze, which is why we have done it for you. View here our financial health controls .
- Previous track record : did REF.UN consistently perform consistently, regardless of the ups and downs in the market? Go into more detail in the previous performance analysis and view the free visual representations of REF.UN & # 39; s historicals for more clarity.
- Other high-performing shares : Are there other stocks offering better prospects with proven track records? Discover our free list of these large shares here .
NB: the figures in this article have been calculated using data from the past twelve months, which refer to the 12-month period ending on the last date of the month, the financial overview is dated. This may not be consistent with annual figures for the full year.
In order to help readers beyond the short-term volatility of the financial market, we want to offer you a long-term research analysis, driven purely by fundamental data. Note that our analysis does not take into account the latest price-sensitive company announcements.
The author is an independent contributor and had no position in the listed shares at the time of publication. For errors that justify correction, please contact the editor on firstname.lastname@example.org .
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