Key Insights

• Institutions' substantial holdings in Enerflex implies that they have significant influence over the company's share price

• 51% of the business is held by the top 18 shareholders

• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of Enerflex Ltd. (TSE:EFX) can tell us which group is most powerful. With 54% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

In the chart below, we zoom in on the different ownership groups of Enerflex.

View our latest analysis for Enerflex

What Does The Institutional Ownership Tell Us About Enerflex?

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.

As you can see, institutional investors have a fair amount of stake in Enerflex. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Enerflex's historic earnings and revenue below, but keep in mind there's always more to the story.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Enerflex. Canoe Financial LP is currently the largest shareholder, with 8.0% of shares outstanding. Equity Group Investments is the second largest shareholder owning 6.7% of common stock, and Scotia Asset Management L.P. holds about 5.6% of the company stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 18 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.