In the wake of Catena Media plc’s (STO:CTM) latest kr181m market cap drop, institutional owners may be forced to take severe actions

Key concept

  • Significant institutional ownership means that Catena Media’s stock prices are sensitive to their trading actions.
  • 8 main shareholders own 51% of the company
  • Proprietary research, along with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Catena Media plc ( STO:CTM ) then you have to look at its share register form. With a stake of 48%, the institution has the largest shareholding in the company. That is, if the stock goes up (or if there is a drop, lose the most) the group stops.

And so it turns out that institutional investors were the most affected group after the company’s market capitalization fell to kr1.6b last week following a 10% drop in share price. The recent loss, which adds up to a 55 percent year-to-date loss for owners, may not sit well with this group of investors. Also referred to as “smart money,” institutions have a lot of influence over how a stock’s price moves. Therefore, if the weakness in Catena Media’s share price continues, institutional investors may be forced to sell the stock, which may not be ideal for individual investors.

In the chart below, we zoom in on Catena Media’s different ownership groups.

See our latest analysis for Catena Media

possession-break
OM: Distribution of CTM Ownership December 18, 2022

What Does Institutional Ownership Tell Us About Catena Media?

Institutions often measure themselves against a benchmark when reporting to their investors, so they are often more enthusiastic about a stock when it is listed on a major. We expect most companies to have some facilities on the register, especially if they are growing.

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Catena Media already has the entity on the share register. In fact, they have a respectable stake in the company. This can indicate that the company has a certain level of credibility in the investment community. However, it is best to be wary of relying on the dubious approval that comes with institutional investors. They, too, are sometimes wrong. If many institutions change their opinion on a stock at the same time, you can see the share price drop quickly. That’s why it’s worth taking a look at Catena Media’s earnings history below. Of course, the future is what really matters.

revenue-and-income-growth
OM: CTM Revenue and Revenue Growth December 18, 2022

It appears that hedge funds own 6.3% of Catena Media’s shares. It interests me because hedge funds sometimes try to influence management, or make changes that will create near-term value for shareholders. Alcur Fonder Ab is currently the company’s largest shareholder with 8.5% of the outstanding shares. The second and third largest shareholders are Investment AB Öresund (publ) and Avanza Fonder AB, with an equal percentage of shares in their name of 7.9%.

We also found that the top 8 shareholders hold more than half of the share register, with several smaller shareholders balancing the interests of the larger ones to some extent.

While it is reasonable to read institutional ownership data for a company, it is also prudent to read analyst sentiment to know which way the wind is blowing. While there is some analyst coverage, the company may not be widely covered. So he could draw more attention, download.

Insider Ownership of Catena Media

The definition of company insiders can be subjective and varies between judges. Our data shows insiders, at least board members. The company’s management runs the business, but the CEO will answer to the board, even if he is a member of it.

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Many consider insider ownership positive because it can indicate that the board is on good terms with other shareholders. However, sometimes too much power is concentrated in this group.

Our data shows that insiders own less than 1% of Catena Media plc. We note, however, that insiders may have an indirect interest through a private company or other corporate structure. The board appears to hold about 13 million shares. This compares to a market capitalization of kr1.6b. Most people tend to prefer to see a board with larger shares. A good next step might be to look at this free summary of insider trading.

General Public Ownership

The public, which is usually individual investors, holds a 40% stake in Catena Media. While this group doesn’t necessarily call the shots, it can certainly have a real impact on how the company is run.

Property of Private Company

Our data shows that Private Equity holds 4.7% of the company’s shares. It is difficult to draw conclusions from this fact alone, so it is worth looking at the owners of these private companies. Sometimes internal or other related parties have an interest in sharing a public company with a different private company.

First Steps:

While it is worth considering the various groups that own a company, there are other factors that are even more important. Be aware that Catena Media shows 2 warning signs in our investment analysis you should on…

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If you prefer what the analysis predicts in terms of future growth, keep this in mind free of charge reports on analyst forecasts.

NB: The figures in this article are calculated using data for the last twelve months, which refers to the 12-month period ending on the last day of the month in which the financial statement is included. This may not be consistent with the annual report numbers for the entire year.

Valuation is complicated, but we help make it simple.

Find out if Catena Media potentially overvalued or undervalued by checking our comprehensive analysis, which includes fair value estimates, risk and caution, distribution, insider dealings and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased method and our articles are not intended to be financial advice. It does not constitute an offer to buy or sell a stock, and does not take into account your goals, or your financial situation. Our aim is to bring a long-term analysis driven by primary data. Note that our analysis may not factor in the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in any of the stocks mentioned.

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