What Kind Of Shareholders Hold The Majority In ClearView Wealth Limited's (ASX:CVW) Shares?

By
Simply Wall St
Published
August 31, 2021
ASX:CVW
Source: Shutterstock

A look at the shareholders of ClearView Wealth Limited (ASX:CVW) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

ClearView Wealth is a smaller company with a market capitalization of AU$368m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about ClearView Wealth.

See our latest analysis for ClearView Wealth

ownership-breakdown
ASX:CVW Ownership Breakdown August 31st 2021

What Does The Institutional Ownership Tell Us About ClearView Wealth?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that ClearView Wealth does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 ClearView Wealth, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
ASX:CVW Earnings and Revenue Growth August 31st 2021

ClearView Wealth is not owned by hedge funds. Crescent Capital Partners Management Pty Ltd. is currently the largest shareholder, with 45% of shares outstanding. Sony Financial Holdings Inc., Asset Management Arm is the second largest shareholder owning 15% of common stock, and Colonial First State Investments Limited holds about 4.3% of the company stock. Additionally, the company's CEO Simon Swanson directly holds 2.3% of the total shares outstanding.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of ClearView Wealth

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in ClearView Wealth Limited. It has a market capitalization of just AU$368m, and insiders have AU$22m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 22% stake in ClearView Wealth. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 45%, private equity firms could influence the ClearView Wealth board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Public Company Ownership

It appears to us that public companies own 5.1% of ClearView Wealth. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - ClearView Wealth has 3 warning signs (and 1 which can't be ignored) we think you should know about.

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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