Here's What Else Nutrition Holdings Inc.'s (TSE:BABY) Shareholder Ownership Structure Looks Like

By
Simply Wall St
Published
May 19, 2022
TSX:BABY
Source: Shutterstock

Every investor in Else Nutrition Holdings Inc. (TSE:BABY) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Else Nutrition Holdings is not a large company by global standards. It has a market capitalization of CA$140m, 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 on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Else Nutrition Holdings.

View our latest analysis for Else Nutrition Holdings

ownership-breakdown
TSX:BABY Ownership Breakdown May 19th 2022

What Does The Lack Of Institutional Ownership Tell Us About Else Nutrition Holdings?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Else Nutrition Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

earnings-and-revenue-growth
TSX:BABY Earnings and Revenue Growth May 19th 2022

Else Nutrition Holdings is not owned by hedge funds. The company's CEO Hamutal Yitzhak is the largest shareholder with 13% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 10%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Uriel Kesler is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A deeper look at our ownership data shows that the top 12 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Else Nutrition 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. 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.

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.

It seems insiders own a significant proportion of Else Nutrition Holdings Inc.. Insiders own CA$42m worth of shares in the CA$140m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 60% of Else Nutrition Holdings. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Equity Ownership

Private equity firms hold a 10% stake in Else Nutrition Holdings. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Else Nutrition Holdings better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Else Nutrition Holdings .

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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