Insiders own 30% of CSP Inc. (NASDAQ:CSPI) shares but individual investors control 42% of the company
Key Insights
Significant control over CSP by individual investors implies that the general public has more power to influence management and governance-related decisions
A total of 14 investors have a majority stake in the company with 51% ownership
A look at the shareholders of CSP Inc. (NASDAQ:CSPI) can tell us which group is most powerful. The group holding the most number of shares in the company, around 42% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).
Individual insiders, on the other hand, account for 30% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
In the chart below, we zoom in on the different ownership groups of CSP.
See our latest analysis for CSP
What Does The Institutional Ownership Tell Us About CSP?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
CSP 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. 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 CSP's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in CSP. Joseph Nerges is currently the company's largest shareholder with 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.2% and 6.0%, of the shares outstanding, respectively. Victor Dellovo, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
After doing some more digging, we found that the top 14 have the combined ownership of 51% 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of CSP
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that insiders maintain a significant holding in CSP Inc.. It has a market capitalization of just US$227m, and insiders have US$69m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 42% stake in the company, and hence can't easily be ignored. 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.
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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for CSP (of which 1 is potentially serious!) you should know about.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.
