Stock Analysis

What Kind Of Investors Own Most Of Calidus Resources Limited (ASX:CAI)?

ASX:CAI
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A look at the shareholders of Calidus Resources Limited (ASX:CAI) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. 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.

Calidus Resources is not a large company by global standards. It has a market capitalization of AU$149m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are not really that prevalent on the share registry. Let's delve deeper into each type of owner, to discover more about Calidus Resources.

Check out our latest analysis for Calidus Resources

ownership-breakdown
ASX:CAI Ownership Breakdown February 24th 2021

What Does The Institutional Ownership Tell Us About Calidus Resources?

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.

Since institutions own only a small portion of Calidus Resources, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
ASX:CAI Earnings and Revenue Growth February 24th 2021

Hedge funds don't have many shares in Calidus Resources. Our data shows that Keras Resources Plc is the largest shareholder with 21% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 5.3%, of the shares outstanding, respectively. David Reeves, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 21 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Calidus Resources

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own a reasonable proportion of Calidus Resources Limited. It has a market capitalization of just AU$149m, and insiders have AU$18m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- mostly retail investors -- own 51% of Calidus Resources. This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Public Company Ownership

Public companies currently own 33% of Calidus Resources stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Calidus Resources (at least 2 which make us uncomfortable) , and understanding them should be part of your investment process.

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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