Capral Limited (ASX:CAA) is largely controlled by institutional shareholders who own 50% of the company

editorial-team@simplywallst.com (Simply Wall St)

Sun, Mar 17, 2024, 10:27 PM 4 min read

Key Insights

Significantly high institutional ownership implies Capral's stock price is sensitive to their trading actions
A total of 6 investors have a majority stake in the company with 52% ownership
Recent sales by insiders

Every investor in Capral Limited (ASX:CAA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 50% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

Let's delve deeper into each type of owner of Capral, beginning with the chart below.

See our latest analysis for Capral

ownership-breakdown — ASX:CAA Ownership Breakdown March 18th 2024

What Does The Institutional Ownership Tell Us About Capral?

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 Capral does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Capral's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — ASX:CAA Earnings and Revenue Growth March 18th 2024

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Capral. Orbis Investment Management Limited is currently the largest shareholder, with 22% of shares outstanding. With 11% and 5.7% of the shares outstanding respectively, National Exchange Pty. Ltd., Asset Management Arm and Perpetual Limited are the second and third largest shareholders. In addition, we found that Anthony Dragicevich, the CEO has 3.5% of the shares allocated to their name.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Capral

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can report that insiders do own shares in Capral Limited. It has a market capitalization of just AU$157m, and insiders have AU$15m worth of shares, in their own names. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Capral. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Capral (1 is significant) that 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.