Key Insights
- The considerable ownership by retail investors in Kingsway Financial Services indicates that they collectively have a greater say in management and business strategy
- The top 5 shareholders own 51% of the company
- Recent purchases by insiders
To get a sense of who is truly in control of Kingsway Financial Services Inc. (NYSE:KFS), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 29% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And hedge funds on the other hand have a 24% ownership in the company.
In the chart below, we zoom in on the different ownership groups of Kingsway Financial Services.
View our latest analysis for Kingsway Financial Services
What Does The Institutional Ownership Tell Us About Kingsway Financial Services?
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.
We can see that Kingsway Financial Services 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 Kingsway Financial Services, (below). Of course, keep in mind that there are other factors to consider, too.
It looks like hedge funds own 24% of Kingsway Financial Services shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Stilwell Value LLC is currently the largest shareholder, with 24% of shares outstanding. Oakmont Capital Inc is the second largest shareholder owning 9.0% of common stock, and Charles Frischer holds about 6.7% of the company stock. Charles Frischer, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that John Fitzgerald, the CEO has 5.8% of the shares allocated to their name.
Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Kingsway Financial Services
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.
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 Kingsway Financial Services Inc.. Insiders own US$42m worth of shares in the US$220m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kingsway Financial Services. 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 Company Ownership
It seems that Private Companies own 9.0%, of the Kingsway Financial Services stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Kingsway Financial Services better, we need to consider many other factors.
Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
