Stock Analysis

What Kind Of Shareholders Hold The Majority In Else Nutrition Holdings Inc.'s (CVE:BABY) Shares?

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TSX:BABY
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If you want to know who really controls Else Nutrition Holdings Inc. (CVE:BABY), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Else Nutrition Holdings is a smaller company with a market capitalization of CA$365m, so it may still be flying under the radar 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. We can zoom in on the different ownership groups, to learn more about Else Nutrition Holdings.

View our latest analysis for Else Nutrition Holdings

ownership-breakdown
TSXV:BABY Ownership Breakdown January 11th 2021

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

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. 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.

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TSXV:BABY Earnings and Revenue Growth January 11th 2021

Hedge funds don't have many shares in Else Nutrition Holdings. Looking at our data, we can see that the largest shareholder is the CEO Hamutal Yitzhak with 16% of shares outstanding. Uriel Kesler is the second largest shareholder owning 14% of common stock, and NewH2 Limited holds about 11% of the company stock. Interestingly, the second-largest shareholder, Uriel Kesler is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

On studying our ownership data, we found that 12 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. 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 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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our most recent data indicates that insiders own a reasonable proportion of Else Nutrition Holdings Inc.. Insiders have a CA$123m stake in this CA$365m business. 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, who are mostly retail investors, collectively hold 55% of Else Nutrition Holdings shares. With this size 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 decline an acquisition or merger that may not improve profitability.

Private Equity Ownership

With a stake of 11%, private equity firms could influence the Else Nutrition Holdings board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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. Be aware that Else Nutrition Holdings is showing 3 warning signs in our investment analysis , and 1 of those is significant...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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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