Key Insights

• Significant control over Dollarama by individual investors implies that the general public has more power to influence management and governance-related decisions

• 35% of the business is held by the top 25 shareholders

• Insiders have been selling lately

To get a sense of who is truly in control of Dollarama Inc. (TSE:DOL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 6.0% price drop, institutions with their 44% holdings also suffered.

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

Check out our latest analysis for Dollarama

What Does The Institutional Ownership Tell Us About Dollarama?

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.

Dollarama already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Dollarama, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Dollarama. Caisse de dép?t et placement du Québec is currently the company's largest shareholder with 4.7% of shares outstanding. With 4.5% and 3.9% of the shares outstanding respectively, FMR LLC and The Vanguard Group, Inc. are the second and third largest shareholders. Additionally, the company's CEO Neil Rossy directly holds 0.5% of the total shares outstanding.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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.