Could the ownership structure of CTEK AB (publ) (STO:CTEK) tell us something useful?

The large shareholder groups of CTEK AB (publ) (STO:CTEK) have power over the company. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said he likes “a business with enduring competitive advantages that is led by capable, owner-oriented people.” So it’s nice to see some insider ownership, as it may suggest management is owner-driven.

CTEK is a small company with a market capitalization of 6.2 billion kr, so it may still fly under the radar of many institutional investors. Looking at our ownership group data (below), it appears that institutions own shares in the company. Let’s dig deeper into each owner type to learn more about CTEK.

Check out our latest analysis for CTEK

OM: Distribution of ownership of CTEK March 27, 2022

What does institutional ownership tell us about CTEK?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors own a sizeable portion of CTEK. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking CTEK’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
OM: CTEK Profit and Revenue Growth March 27, 2022

CTEK does not belong to hedge funds. Investment AB Latour (publ) is currently the company’s largest shareholder with 31% of the outstanding shares. In comparison, the second and third shareholders hold approximately 7.1% and 5.2% of the shares.

Looking further, we found that 53% of the shares are held by the top 5 shareholders. In other words, these shareholders have a say in the decisions of the company.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There is some analyst coverage of the stock, but it could still become better known over time.

Insider Ownership of CTEK

The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

Our most recent data indicates that insiders hold shares of CTEK AB (publ). In their own name, insiders hold 558 million kr worth of shares in the company at 6.2 billion kr. Some would say this shows the alignment of interests between shareholders and the board. But it might be worth checking to see if these insiders have sold.

General public property

With a 41% stake, the general public, consisting mainly of individual investors, has some influence over CTEK. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Private equity ownership

With a 31% stake, private equity firms are able to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private capital sticking around for the long haul, but generally they have a shorter investment horizon and, as the name suggests, don’t invest heavily in public companies. After a while, they may look to sell and redeploy capital elsewhere.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. For example, we have identified 4 warning signs for CTEK (1 is potentially serious) of which you should be aware.

But finally it’s the future, not the past, that will determine the success of the owners of this business. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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