With 43% ownership in Combined Motor Holdings Limited (JSE:CMH), insiders continue to have the largest holding even though they have sold shares recently

editorial-team@simplywallst.com (Simply Wall St)

Fri, Dec 27, 2024, 11:00 PM 4 min read

Key Insights

Significant insider control over Combined Motor Holdings implies vested interests in company growth
A total of 4 investors have a majority stake in the company with 52% ownership
Insiders have sold recently

A look at the shareholders of Combined Motor Holdings Limited (JSE:CMH) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And insiders own the top position in the company’s share registry despite recent sales.

In the chart below, we zoom in on the different ownership groups of Combined Motor Holdings.

View our latest analysis for Combined Motor Holdings

ownership-breakdown — JSE:CMH Ownership Breakdown December 28th 2024

What Does The Institutional Ownership Tell Us About Combined Motor Holdings?

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.

We can see that Combined Motor Holdings does have institutional investors; and they hold a good portion of the company's stock. 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 Combined Motor Holdings' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — JSE:CMH Earnings and Revenue Growth December 28th 2024

Combined Motor Holdings is not owned by hedge funds. With a 35% stake, CEO Jebb McIntosh is the largest shareholder. For context, the second largest shareholder holds about 7.9% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder. Interestingly, the second-largest shareholder, Stuart Jackson is also Chief Financial Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Combined Motor Holdings

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. 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 most recent data indicates that insiders own a reasonable proportion of Combined Motor Holdings Limited. Insiders own R1.1b worth of shares in the R2.5b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Combined Motor Holdings. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Combined Motor Holdings that you should be aware of before investing here.

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.