What Type Of Shareholders Make Up Computer Modelling Group Ltd.'s (TSE:CMG) Share Registry?

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Simply Wall St

Sat, Aug 22, 2020, 8:07 AM 4 min read

The big shareholder groups in Computer Modelling Group Ltd. (TSE:CMG) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

Computer Modelling Group is a smaller company with a market capitalization of CA$421m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Computer Modelling Group.

Check out our latest analysis for Computer Modelling Group

ownership-breakdown — TSX:CMG Ownership Breakdown August 22nd 2020

What Does The Institutional Ownership Tell Us About Computer Modelling Group?

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 Computer Modelling Group 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 Computer Modelling Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — TSX:CMG Earnings and Revenue Growth August 22nd 2020

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Computer Modelling Group. Burgundy Asset Management Ltd. is currently the company's largest shareholder with 20% of shares outstanding. EdgePoint Investment Group Inc. is the second largest shareholder owning 13% of common stock, and T. Rowe Price Group, Inc. holds about 8.8% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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.

Insider Ownership Of Computer Modelling Group

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. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Computer Modelling Group Ltd.. In their own names, insiders own CA$18m worth of stock in the CA$421m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 27% ownership, the general public have some degree of sway over Computer Modelling Group. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Computer Modelling Group better, we need to consider many other factors. For example, we've discovered 3 warning signs for Computer Modelling Group that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

This article by Simply Wall St is general in nature. 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.

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