Who Are SMTC Corporation’s (NASDAQ:SMTX) Major S

Who Are SMTC Corporation’s (NASDAQ:SMTX) Major Shareholders?



In this article, I’m going to take a look at SMTC Corporation’s (NASDAQ:SMTX) latest ownership structure, a non-fundamental factor which is important, but remains a less discussed subject among investors. The impact of a company’s ownership structure affects both its short- and long-term performance. Since the same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, it is a useful exercise to deconstruct SMTX’s shareholder registry.



Institutional Ownership
Institutional investors are one of the largest group of market participants and their buy-sell decisions on a company’s stock can significantly impact prices, more so, when there are relatively small amounts of shares available on the market to trade. Generally, an institutional ownership of 8.71%, in the case of SMTX, should not concern investors in terms of high stock volatility. Another important owner type is hedge funds, who tend to be investors with short-term horizons. With 23.52% ownership in SMTX, they seem to have a significant enough holding to cause a spike in volatility in the short run. I am going to further examine the stock’s other major shareholders to figure out how they can affect the company’s investment profile for the long-term investor.

Insider Ownership
Insiders form another group of important ownership types as they manage the company’s operations and decide the best use of capital. Insider ownership has been linked to better alignment between management and shareholders. 10.14% ownership of SMTX insiders is large enough to make an impact on shareholder returns. In general, this level of insider ownership has negatively affected underperforming (consistently low PE ratio) companies and positively affected the companies that outperform (consistently high PE ratio). It’s also interesting to learn what SMTX insiders have been doing with their shareholdings lately. Insider buying may be a sign of upbeat future expectations, however, selling doesn’t necessarily mean the opposite as insiders may be motivated by their personal financial needs.



General Public Ownership
The general public holds a substantial 57.63% stake in SMTX, making it a highly popular stock among retail investors. With this size of ownership, retail investors can collectively play a role in major company policies that affect shareholders returns, including executive remuneration and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.