Topicus.com Inc.’s (CVE:TOI) stock price dropped 9.6% last week; public companies would not be happy

Key Insights

• The considerable ownership by public companies in Topicus.com indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 56% of the company
• Recent sales by insiders

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To get a sense of who is truly in control of Topicus.com Inc. (CVE:TOI), it is important to understand the ownership structure of the business. We can see that public companies own the lion’s share in the company with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CA$9.5b last week, public companies would have faced the highest losses than any other shareholder groups of the company.

Let’s delve deeper into each type of owner of Topicus.com, beginning with the chart below.

Check out our latest analysis for Topicus.com

What Does The Institutional Ownership Tell Us About Topicus.com?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Topicus.com does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Topicus.com, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don’t have a meaningful investment in Topicus.com. Constellation Software Inc. is currently the largest shareholder, with 48% of shares outstanding. With 7.2% and 2.0% of the shares outstanding respectively, Akre Capital Management, LLC and EdgePoint Investment Group Inc. are the second and third largest shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. 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 Topicus.com

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can see that insiders own shares in Topicus.com Inc.. This is a big company, so it is good to see this level of alignment. Insiders own CA$154m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Topicus.com. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 48% of Topicus.com. We can’t be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Topicus.com better, we need to consider many other factors. For example, we’ve discovered 3 warning signs for Topicus.com that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.