Who Are The Top Investors In CCP Technologies Limited (ASX:CT1)?...

Who Are The Top Investors In CCP Technologies Limited (ASX:CT1)?

Jacob Boyd April 21, 2018
I am going to take a deep dive into CCP Technologies Limited’s (ASX:CT1) most recent ownership structure, not a frequent subject of discussion among individual investors. Ownership structure has been found to have an impact on shareholder returns in both short- and long-term. If an activist institution invests the same amount of capital in a stock as a passive long-term pension fund, the implications are potentially different for key corporate financing decisions such as the use of excess cash or the source of financing. While these are more of a long-term investor’s concern, short-term investors may find the impact of institutional trading overwhelming enough to lose out on what could be a potential opportunity. Therefore, it is beneficial for us to examine CT1’s ownership structure in more detail.
See our latest analysis for CCP Technologies

ASX:CT1 Ownership_summary Apr 21st 18
Institutional Ownership

Institutional investors are one of the largest group of market participants and their buy-sell decisions on a company’s stock can significantly impact prices, more so, when there are relatively small amounts of shares available on the market to trade. With an institutional ownership of 1.82%, CT1 doesn’t seem too exposed to higher volatility resulting from institutional trading. In addition, the fact that the company is covered by only 1 analyst indicates that it is yet to become popular amongst large sell-side institutions.
Insider Ownership

Insiders form another group of important ownership types as they manage the company’s operations and decide the best use of capital. Insider ownership has been linked to better alignment between management and shareholders. CT1 insiders hold a significant stake of 26.87% in the company. This level of insider ownership has been found to have a negative impact on companies with consistently low PE ratios (underperformers), while it has been positive in the case of high PE ratio firms (outperformers). It may be interesting to take a look at what company insiders have been doing with their holdings lately. Insider buying may be a sign of upbeat future expectations, however, selling doesn’t necessarily mean the opposite as insiders may be motivated by their personal financial needs.

ASX:CT1 Insider_trading Apr 21st 18
General Public Ownership

A big stake of 47.26% in CT1 is held by the general public. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and potential acquisitions. This is a positive sign for an investor who wants to be involved in key decision-making of the company.
Private Company Ownership

Potential investors in CT1 should also look at another important group of investors: private companies, with a stake of 24.06%, who are primarily invested because of strategic and capital gain interests. An ownership of this size indicates a strong financial backing and has the potential to influence CT1’s business strategy. Thus, investors should dig deeper into CT1’s business relations with these companies and how it can affect shareholder returns in the long-term.