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How Many Capstead Mortgage Corporation (NYSE:CMO) Shares Do Institutions Own?

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Every investor in Capstead Mortgage Corporation (NYSE:CMO) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that used to be publicly owned tend to have lower insider ownership.

Capstead Mortgage is a smaller company with a market capitalization of US$746m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about CMO.

See our latest analysis for Capstead Mortgage

NYSE:CMO Ownership Summary, October 25th 2019
NYSE:CMO Ownership Summary, October 25th 2019

What Does The Institutional Ownership Tell Us About Capstead Mortgage?

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 Capstead Mortgage does have institutional investors; and they hold 76% of the stock. 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 Capstead Mortgage's historic earnings and revenue, below, but keep in mind there's always more to the story.

NYSE:CMO Income Statement, October 25th 2019
NYSE:CMO Income Statement, October 25th 2019

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Capstead Mortgage is not owned by hedge funds. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Capstead Mortgage

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

I can report that insiders do own shares in Capstead Mortgage Corporation. In their own names, insiders own US$14m worth of stock in the US$746m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 22% stake in CMO. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Capstead Mortgage better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.