If you want to know who really controls CoreCivic, Inc. (NYSE:CXW), then you’ll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.
With a market capitalization of US$2.3b, CoreCivic is a decent size, so it is probably on the radar of institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about CXW.
What Does The Institutional Ownership Tell Us About CoreCivic?
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.
CoreCivic already has institutions on the share registry. Indeed, they own 84% of 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. 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 CoreCivic’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
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 CoreCivic. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of CoreCivic
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. 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.
Our data suggests that insiders own under 1% of CoreCivic, Inc. in their own names. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around US$18m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
The general public holds a 15% stake in CXW. 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.
It’s always worth thinking about the different groups who own shares in a company. But to understand CoreCivic better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free .
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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