Yahoo Finance Insiders hold 73% of The Colonial Motor Company Limited (NZSE:CMO), and they've been buying recently
Key Insights
Significant insider control over Colonial Motor implies vested interests in company growth
A total of 12 investors have a majority stake in the company with 50% ownership
If you want to know who really controls The Colonial Motor Company Limited (NZSE:CMO), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 73% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
It's interesting to note that insiders have been buying shares recently. This might indicate that they expect share prices to rise in the near future.
Let's delve deeper into each type of owner of Colonial Motor, beginning with the chart below.
View our latest analysis for Colonial Motor
What Does The Institutional Ownership Tell Us About Colonial Motor?
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.
Since institutions own only a small portion of Colonial Motor, 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. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.
Hedge funds don't have many shares in Colonial Motor. From our data, we infer that the largest shareholder is Graeme Gibbons (who also holds the title of Senior Key Executive) with 10% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Stuart Gibbons is the second largest shareholder owning 6.9% of common stock, and James Gibbons holds about 6.4% of the company stock. Interestingly, the second-largest shareholder, Stuart Gibbons is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.
A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Colonial Motor
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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 information suggests that insiders own more than half of The Colonial Motor Company Limited. This gives them effective control of the company. Given it has a market cap of NZ$268m, that means they have NZ$197m worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Colonial Motor. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Colonial Motor (including 1 which doesn't sit too well with us) .
Of course this may not be the best stock to buy. So take a peek at this free 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.
