Institutions along with retail investors who hold considerable shares inCalix Limited (ASX:CXL) come under pressure; lose 13% of holdings value

Key Insights

• Calix's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 17 investors have a majority stake in the company with 50% ownership
• Insiders have been buying lately

To get a sense of who is truly in control of Calix Limited (ASX:CXL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 33% came under pressure after market cap dropped to AU$202m last week,retail investors took the most losses.

Let's delve deeper into each type of owner of Calix, beginning with the chart below.

Check out our latest analysis for Calix

What Does The Institutional Ownership Tell Us About Calix?

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.

Calix already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Calix's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Calix. Looking at our data, we can see that the largest shareholder is Australian Super Pty Ltd with 16% of shares outstanding. The second and third largest shareholders are Nicholas Merriman and TIGA Trading Pty Ltd, Asset Management Arm, with an equal amount of shares to their name at 6.0%. Additionally, the company's CEO Philip Hodgson directly holds 1.9% of the total shares outstanding.

After doing some more digging, we found that the top 17 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Calix

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Calix Limited. Insiders have a AU$39m stake in this AU$202m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 48% stake in Calix. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Calix better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Calix you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts 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 does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.