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A look at the shareholders of Altech Chemicals Limited (ASX:ATC) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’
With a market capitalization of AU$49m, Altech Chemicals is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about ATC.
See our latest analysis for Altech Chemicals
What Does The Institutional Ownership Tell Us About Altech Chemicals?
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.
We can see that Altech Chemicals does have institutional investors; and they hold 11% of the 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 Altech Chemicals’s earnings history, below. Of course, the future is what really matters.
Hedge funds don’t have many shares in Altech Chemicals. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Altech Chemicals
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
I can report that insiders do own shares in Altech Chemicals Limited. It has a market capitalization of just AU$49m, and insiders have AU$4.1m worth of shares, in their own names. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.