Why China Goldcorp Ltd’s (TSXV:CAUH) Investor Composition Impacts Your Returns
In this analysis, my focus will be on developing a perspective on China Goldcorp Ltd’s (TSXV:CAU.H) latest ownership structure, a less discussed, but important factor. The impact of a company’s ownership structure affects both its short- and long-term performance. Differences in ownership structure of companies can have a profound effect on how management’s incentives are aligned with shareholder returns, which is why we’ll take a moment to analyse CAU.H’s shareholder registry. All data provided is as of the most recent financial year end.
Check out our latest analysis for China Goldcorp
General Public Ownership
The general public holds a substantial 94.74% stake in CAU.H, making it a highly popular stock among retail investors. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and potential acquisitions. This is a positive sign for an investor who wants to be involved in key decision-making of the company.
Private Equity Ownership
Private equity firms hold a 5.26% stake in CAU.H. With a stake of this size, they can be influential in key policy decisions. An investor should be encouraged by the ownership of these institutions who are known to be experts in increasing efficiency, improving capital structure and opting for value-accretive policy decisions.
What this means for you:
A large shareholding of CAU.H by the general public could mean higher market liquidity to buy and sell shares for retail investors, and also the potential to have more influence over company policies as a collective. However, if you are building an investment case for CAU.H, ownership structure alone should not dictate your decision to buy or sell the stock. Rather, you should be looking at fundamental drivers such as China Goldcorp’s past track record and financial health. I highly recommend you to complete your research by taking a look at the following:
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
