Institutional owners may take dramatic actions as Claros Mortgage Trust, Inc.'s (NYSE:CMTG) recent 12% drop adds to one-year losses

Key Insights

• Institutions' substantial holdings in Claros Mortgage Trust implies that they have significant influence over the company's share price
• The top 6 shareholders own 51% of the company
• Recent purchases by insiders

We've discovered 2 warning signs about Claros Mortgage Trust. View them for free.

To get a sense of who is truly in control of Claros Mortgage Trust, Inc. (NYSE:CMTG), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 74% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And so it follows that institutional investors was the group most impacted after the company's market cap fell to US$333m last week after a 12% drop in the share price. The recent loss, which adds to a one-year loss of 71% 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 Claros Mortgage Trust's 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 Claros Mortgage Trust.

See our latest analysis for Claros Mortgage Trust

What Does The Institutional Ownership Tell Us About Claros Mortgage Trust?

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 Claros Mortgage Trust 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. 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 Claros Mortgage Trust's earnings history below. Of course, the future is what really matters.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Claros Mortgage Trust. Hyundai Investment Management Co. Ltd. is currently the largest shareholder, with 15% of shares outstanding. Spring Creek Capital, LLC is the second largest shareholder owning 11% of common stock, and BlackRock, Inc. holds about 7.0% of the company stock. Additionally, the company's CEO Richard Mack directly holds 1.5% of the total shares outstanding.

We also observed that the top 6 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 Claros Mortgage Trust

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Claros Mortgage Trust, Inc.. In their own names, insiders own US$6.9m worth of stock in the US$333m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Claros Mortgage Trust. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Claros Mortgage Trust (including 1 which makes us a bit uncomfortable) .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.