Here's What Covenant Logistics Group, Inc.'s (NASDAQ:CVLG) Shareholder Ownership Structure Looks Like

By
Simply Wall St
Published
September 22, 2021
NasdaqGS:CVLG
Source: Shutterstock

If you want to know who really controls Covenant Logistics Group, Inc. (NASDAQ:CVLG), then you'll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Covenant Logistics Group is a smaller company with a market capitalization of US$454m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Covenant Logistics Group.

Check out our latest analysis for Covenant Logistics Group

ownership-breakdown
NasdaqGS:CVLG Ownership Breakdown September 22nd 2021

What Does The Institutional Ownership Tell Us About Covenant Logistics 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.

Covenant Logistics Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Covenant Logistics Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:CVLG Earnings and Revenue Growth September 22nd 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Covenant Logistics Group is not owned by hedge funds. With a 13% stake, CEO David Parker is the largest shareholder. Jacqueline Parker is the second largest shareholder owning 11% of common stock, and BlackRock, Inc. holds about 8.7% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 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 Covenant Logistics Group

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems insiders own a significant proportion of Covenant Logistics Group, Inc.. Insiders have a US$175m stake in this US$454m 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 holds a 10% stake in Covenant Logistics Group. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Covenant Logistics Group .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.
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