In this analysis, my focus will be on developing a perspective on Public Joint Stock Company Chelyabinsk Pipe – Rolling Plant’s (MISX:CHEP) latest ownership structure, a less discussed, but important factor. The impact of a company’s ownership structure affects both its short- and long-term performance. The same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, which is a decisive factor for a long-term investor. It also impacts the trading environment of company shares, which is more of a concern for short-term investors. Therefore, it is beneficial for us to examine CHEP’s ownership structure in more detail.See our latest analysis for Chelyabinsk Pipe – Rolling Plant
Institutional OwnershipDue to the big order sizes of institutional investors, a company’s shares can experience large, one-sided momentum, driven by high volume of shares removed from, or injected into, the market. The company hardly has institutions in its ownership structure, indicating limited concern for investors to worry about potential sell-offs that could arise due to extensive liquidation.
Insider OwnershipInsiders 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. With 9.41% ownership, CHEP insiders is an important ownership type. An insider stake of this level indicates that executives are highly aligned with the shareholders as both stand to gain when the value of the company rises. I will also like to check what insiders have been doing recently with their holdings. 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.
General Public OwnershipThe general public, with 9.49% stake, is also an important group of shareholders in CHEP. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies if it aligns with other large shareholders.
Private Company OwnershipAnother important group of owners for potential investors in CHEP are private companies that hold a stake of 81.10% in CHEP. These are companies that are mainly invested due to their strategic interests or are incentivized by reaping capital gains on investments their shareholdings. An ownership of this size indicates a strong financial backing and has the potential to influence CHEP’s business strategy. Thus, investors should dig deeper into CHEP’s business relations with these companies and how it can affect shareholder returns in the long-term.
With a low level of institutional ownership, investors in CHEP need not worry about non-fundamental factors such as ownership structure causing large impact on stock prices. However, ownership structure should not be the only focus of your research when constructing an investment thesis around CHEP. Instead, you should be evaluating company-specific factors such as the intrinsic valuation, which is a key driver of Chelyabinsk Pipe – Rolling Plant’s share price. I urge you to complete your research by taking a look at the following:
- Financial Health: Is CHEP’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Past Track Record: Has CHEP been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of CHEP’s historicals for more clarity.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.