Are institutions investing heavily in Yellow Pages Limited (TSE:Y) stock?

A look at the shareholders of Yellow Pages Limited (TSE:Y) can tell us which group is the most powerful. Institutions often own shares in larger companies, and we expect to see insiders owning a noticeable percentage of smaller ones. Companies that were previously publicly owned tend to have less insider ownership.

Yellow Pages is a small company with a market capitalization of C$374 million, so it may still fly under the radar of many institutional investors. In the chart below, we can see that institutional investors have bought the company. We can zoom in on the different ownership groups, to learn more about the Yellow Pages.

See our latest analysis for the Yellow Pages

distribution of property

What does institutional ownership tell us about the yellow pages?

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 own a sizable share of the Yellow Pages. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out the past revenue trajectory of the Yellow Pages (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth

earnings-and-revenue-growth

Hedge funds appear to own 52% of Yellow Pages shares. This catches my attention because hedge funds sometimes try to influence management or make changes that will create short-term shareholder value. Looking at our data, we can see that the largest shareholder is Canso Investment Counsel Ltd. with 25% of the shares outstanding. With 21% and 17% of the shares outstanding, respectively, Empyrean Capital Partners, LP and GoldenTree Asset Management LP are the second and third largest shareholders.

After digging a little deeper, we found that the top 3 shareholders collectively control more than half of the company’s stock, implying that they have considerable power to influence company decisions.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. There is some analyst coverage of the stock, but it could still become better known over time.

Yellow Pages Insider Property

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of Yellow Pages Limited. It appears that the board of directors owns about C$2.6 million worth of stock. This compares to a market capitalization of C$374 million. Many tend to prefer to see a board with larger holdings. A good next step might be to take a look at this free summary of insider buying and selling.

General public property

The general public, including retail investors, owns 16% of the company’s capital and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Next steps:

I find it very interesting to see who exactly owns a business. But to really get insight, we also need to consider other information. Take risks for example – Yellow Pages a 1 warning sign we think you should know.

But finally it’s the future, not the past, that will determine the success of the owners of this business. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Calvin W. Soper