Yahoo Finance 50% of COSOL Limited (ASX:COS) is owned by insiders, and they've been buying recently
Key Insights
Significant insider control over COSOL implies vested interests in company growth
52% of the business is held by the top 6 shareholders
A look at the shareholders of COSOL Limited (ASX:COS) can tell us which group is most powerful. The group holding the most number of shares in the company, around 50% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
A quick look at our data suggests that insiders have been buying shares in the company recently. This could be interpreted as insiders anticipating a rise in stock prices in the near future.
In the chart below, we zoom in on the different ownership groups of COSOL.
View our latest analysis for COSOL
What Does The Institutional Ownership Tell Us About COSOL?
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.
Since institutions own only a small portion of COSOL, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
COSOL is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Geoffrey Lewis with 14% of shares outstanding. With 14% and 13% of the shares outstanding respectively, Stephen Edward Johnston and Jrf Co Pty Ltd are the second and third largest shareholders. Furthermore, CEO Scott McGowan is the owner of 2.9% of the company's shares.
On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of COSOL
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own a reasonable proportion of COSOL Limited. It has a market capitalization of just AU$153m, and insiders have AU$76m worth of shares in their own names. 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
The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
It seems that Private Companies own 14%, of the COSOL stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for COSOL you should be aware of.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
