Computer Modelling Group Ltd.'s (TSE:CMG) large institutional owners must be happy as stock continues to impress, up 9.0% over the past week

Key Insights

• Given the large stake in the stock by institutions, Computer Modelling Group's stock price might be vulnerable to their trading decisions
• The top 10 shareholders own 50% of the company
• Insiders have been selling lately

Every investor in Computer Modelling Group Ltd. (TSE:CMG) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And as as result, institutional investors reaped the most rewards after the company's stock price gained 9.0% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 111%.

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

Check out our latest analysis for Computer Modelling Group

What Does The Institutional Ownership Tell Us About Computer Modelling Group?

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.

We can see that Computer Modelling Group 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Computer Modelling Group's earnings history below. Of course, the future is what really matters.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Computer Modelling Group. EdgePoint Investment Group Inc. is currently the largest shareholder, with 26% of shares outstanding. FMR LLC is the second largest shareholder owning 9.6% of common stock, and Royce & Associates, LP holds about 3.8% of the company stock.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Computer Modelling Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can report that insiders do own shares in Computer Modelling Group Ltd.. It has a market capitalization of just CA$1.1b, and insiders have CA$23m 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, who are usually individual investors, hold a 44% stake in Computer Modelling Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Computer Modelling Group better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Computer Modelling Group .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com