Key Insights
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The considerable ownership by individual investors in Coronation Fund Managers indicates that they collectively have a greater say in management and business strategy
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A total of 12 investors have a majority stake in the company with 51% ownership
To get a sense of who is truly in control of Coronation Fund Managers Limited (JSE:CML), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 39% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 26% ownership in the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let’s take a closer look to see what the different types of shareholders can tell us about Coronation Fund Managers.
Check out our latest analysis for Coronation Fund Managers
What Does The Institutional Ownership Tell Us About Coronation Fund Managers?
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.
Coronation Fund Managers already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Coronation Fund Managers, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in Coronation Fund Managers. Our data shows that Public Investment Corporation Limited is the largest shareholder with 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 5.7%, of the shares outstanding, respectively. Furthermore, CEO Anton Pillay is the owner of 1.4% of the company’s shares.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Coronation Fund Managers
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a reasonable proportion of Coronation Fund Managers Limited. Insiders have a R1.1b stake in this R11b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. 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 Coronation Fund Managers. 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.
Private Company Ownership
It seems that Private Companies own 4.2%, of the Coronation Fund Managers stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it’s hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We’ve identified 4 warning signs with Coronation Fund Managers (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.
If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.
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.
