The big shareholder groups in Robex Resources Inc. (CVE:RBX) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.
With a market capitalization of CA$96m, Robex Resources is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are not on the share registry. Let’s delve deeper into each type of owner, to discover more about Robex Resources.
What Does The Lack Of Institutional Ownership Tell Us About Robex Resources?
We don’t tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it’s not particularly common.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Robex Resources’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.
We note that hedge funds don’t have a meaningful investment in Robex Resources. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Robex Resources’s case, its President, Georges Cohen, is the largest shareholder, holding 59% of shares outstanding. The second largest shareholder with 3.6%, is Julien Cohen, followed by Benjamin Cohen, with an ownership of 3.1%. They also hold the titles of Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company’s top shareholders.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Robex Resources
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. 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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
It seems that insiders own more than half the Robex Resources Inc. stock. This gives them a lot of power. Given it has a market cap of CA$96m, that means they have CA$64m worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public holds a 33% stake in RBX. 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.
It’s always worth thinking about the different groups who own shares in a company. But to understand Robex Resources better, we need to consider many other factors. Case in point: We’ve spotted 2 warning signs for Robex Resources you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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