In the wake of the recent £103m market capitalization drop of Clarkson PLC (LON:CKN) in the UK, institutional owners may be forced to take drastic action.

the main ideas

  • Significantly higher institutional ownership indicates that Clarkson’s stock prices are sensitive to its trading actions.
  • The 12 largest shareholders own 51% of the company
  • Proprietary research combined with analyst forecast data helps provide a good understanding of the opportunities in the stock

Every investor in Clarkson PLC (LON: CKN) should be aware of the most powerful shareholder groups. We can see that institutions own the lion’s share of the company with an ownership percentage of 71%. In other words, the group faces the maximum possible risk (or downside risk).

Institutional investors saw the value of their holdings drop by 10% last week. The latest loss, which adds up to a one-year loss of 20% for shareholders, may not sit well with this group of investors. Institutions or “liquidity providers” control large sums of money and, therefore, these types of investors usually have a significant impact on stock price movements. Hence, if the weakness in Clarkson’s share price continues, institutional investors may feel compelled to sell the stock, which may not be ideal for retail investors.

Let’s dive into each type of Clarkson owner, starting with the chart below.

View our latest analysis for Clarkson

LSE: CKN Ownership Breakdown January 15, 2023

What does corporate ownership tell us about Clarkson?

Institutions usually measure themselves against a standard when reporting to their investors, so they often get more excited about a stock once it’s included in a leading index. We expect most businesses to have some foundation on record, especially if they’re growing.

Clarkson already has enterprises on the stock register. In fact, they own a respectable stake in the company. This means that the analysts working for those institutions have looked at the stock and liked it. But like everyone else, they can be wrong. When several organizations own a stock, there is always a risk that it may be in a “crowd trade”. When such a trade goes wrong, multiple parties may compete to sell the shares quickly. This risk is higher in a company with no history of growth. You can see Clarkson’s historical earnings and earnings below, but keep in mind that there’s always more to the story.

Profits and revenue growth
LSE: CKN Earnings and Revenue Growth on January 15, 2023

Institutional investors own more than 50% of the company, so it’s possible that they can influence the decisions of the board of directors very strongly. We note that hedge funds have no beneficial investment in Clarkson. FMR LLC is currently the largest shareholder in the company with 7.4% of the shares outstanding. Clarkson plc, ESOP is the second largest shareholder owning 6.8% of the common shares, Clarksons Norway AS owns about 6.2% of the company’s shares. Additionally, we found that Andi Case, CEO has 1.8% of the shares allotted to her name.

Looking at the shareholder history, we can see that 51% of the ownership is controlled by the 12 largest shareholders, which means that no single shareholder has a majority ownership stake.

Researching corporate ownership is a good way to gauge and filter the expected performance of a stock. The same can be achieved by studying the sentiments of analysts. There are a lot of analysts covering the stock, so it might be worth seeing what they expect as well.

Inside the Clarkson property

The definition of insider can vary slightly between different countries, but board members always count. Management ultimately responds to the board of directors. However, it is not uncommon for directors to be members of the executive board, especially if they are a founder or CEO.

In general, I consider indoor ownership to be a good thing. However, in some cases it is difficult for other shareholders to hold the board of directors accountable for decisions.

We can report that Insiders own shares in Clarkson PLC. It’s a very large company, so it’s generally positive to see some potentially meaningful alignings. In this case, they own approximately £21m of shares (at current prices). It’s good to see this level of investment from the insiders. You can check here to see if these Insiders have recently purchased.

Public property

With 13% ownership, the general public, made up mostly of individual investors, has some degree of influence over Clarkson. While this size of ownership may not be enough to influence a policy decision in their favour, they can still have a collective impact on company policies.

Ownership of private companies

We can see that private companies own 6.7% of the shares offered. It might be worth digging deeper into this. If related parties, such as insiders, have an interest in one of these private companies, this must be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next steps:

I find it interesting to know exactly who owns a company. But to truly gain insight, we need to consider other information as well. For example, we have defined 2 warning signs for Clarkson (1 can not be ignored) that you should be aware of.

finally The future is the most important. You can access this Free A report on analyst expectations for the company.

Note: The figures in this article are calculated using data from the past twelve months, which refers to the 12-month period ending at the last date of the month in which the financial statement is dated. This may not be consistent with the annual report numbers for the full year.

Evaluation is complex, but we help make it simple.

Find out if Clarkson potentially overvalued or undervalued by checking our comprehensive analysis, which includes Fair value estimates, risks and warnings, dividends, insider transactions and financial soundness.

View the free analysis

This article written by Simply Wall St is general in nature. We provide comments based on historical data and analyst predictions 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 it does not take into account your objectives or financial situation. We aim to provide you with focused, long-term analysis driven by fundamental data. Note that our analysis may not include the company’s most recent price-sensitive announcements or specific materials. Wall Street simply has no position in any of the stocks mentioned.

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