NASDAQ:CNDT) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.” data-reactid=”28″>The big shareholder groups in Conduent Incorporated (NASDAQ:CNDT) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.
Conduent is not a large company by global standards. It has a market capitalization of US$754m, which means it wouldn’t have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholders can tell us about Conduent.
See our latest analysis for Conduent ” data-reactid=”30″> See our latest analysis for Conduent
What Does The Institutional Ownership Tell Us About Conduent?
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.
We can see that Conduent does have institutional investors; and they hold a good portion of the company’s 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. 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 Conduent’s earnings history below. Of course, the future is what really matters.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don’t have a meaningful investment in Conduent. The company’s largest shareholder is Icahn Capital LP, with ownership of 18%. Meanwhile, the second and third largest shareholders, hold 7.2% and 6.1%, of the shares outstanding, respectively. Additionally, the company’s CEO Clifford Skelton directly holds 1.1% of the total shares outstanding.
On further inspection, we found that more than half the company’s shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Conduent
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
click here to see if those insiders have been buying or selling. ” data-reactid=”72″>Shareholders would probably be interested to learn that insiders own shares in Conduent Incorporated. As individuals, the insiders collectively own US$43m worth of the US$754m 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 14% stake in Conduent. 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.
2 warning signs we think you should be aware of.” data-reactid=”76″>It’s always worth thinking about the different groups who own shares in a company. But to understand Conduent better, we need to consider many other factors. Take risks for example – Conduent has 2 warning signs we think you should be aware of.
this free report showing whether analysts are predicting a brighter future.” data-reactid=”77″>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.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”79″>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. 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.