- Professional Services
Institutional investors may adopt severe steps after Computer Age Management Services Limited's (NSE:CAMS) latest 5.9% drop adds to a year losses
- Significantly high institutional ownership implies Computer Age Management Services' stock price is sensitive to their trading actions
- 50% of the business is held by the top 13 shareholders
- Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
To get a sense of who is truly in control of Computer Age Management Services Limited (NSE:CAMS), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And institutional investors endured the highest losses after the company's share price fell by 5.9% last week. The recent loss, which adds to a one-year loss of 7.3% for stockholders, may not sit well with this group of investors. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. Hence, if weakness in Computer Age Management Services' share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.
Let's take a closer look to see what the different types of shareholders can tell us about Computer Age Management Services.
See our latest analysis for Computer Age Management Services
What Does The Institutional Ownership Tell Us About Computer Age Management Services?
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 Computer Age Management Services does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Computer Age Management Services' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Computer Age Management Services. Our data shows that Warburg Pincus LLC is the largest shareholder with 20% of shares outstanding. With 6.0% and 4.7% of the shares outstanding respectively, Housing Development Finance Corporation Limited and Life Insurance Corporation of India, Asset Management Arm are the second and third largest shareholders.
After doing some more digging, we found that the top 13 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Computer Age Management Services
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 Age Management Services Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹3.8b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 25% stake in Computer Age Management Services. 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.
Private Equity Ownership
With a stake of 20%, private equity firms could influence the Computer Age Management Services board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Public Company Ownership
Public companies currently own 6.0% of Computer Age Management Services stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
It's always worth thinking about the different groups who own shares in a company. But to understand Computer Age Management Services better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Computer Age Management Services , and understanding them should be part of your investment process.
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.
Computer Age Management Services
Computer Age Management Services Limited, a mutual fund transfer agency, provides services to private equity funds, and banks and non-banking finance companies in India.
Excellent balance sheet average dividend payer.