The big shareholder groups in Canyon Creek Food Company Ltd. (CVE:CYF) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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$527k, Canyon Creek Food 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 don't own shares in the company. Let's delve deeper into each type of owner, to discover more about Canyon Creek Food.
What Does The Lack Of Institutional Ownership Tell Us About Canyon Creek Food?
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 are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. 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. Canyon Creek Food'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.
Hedge funds don't have many shares in Canyon Creek Food. The company's largest shareholder is Chemco Electrical Contractors Ltd., with ownership of 36%, The second and third largest shareholders are Brian Halina and Terence Alty, holding 18% and 2.3%, respectively. Terence Alty also happens to hold the title of Member of the Board of Directors.
Our analysis suggests that the top 2 shareholders collectively control 54% of the company's shares, implying that they have considerable power to influence the company's decisions.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Canyon Creek Food
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 information suggests that insiders maintain a significant holding in Canyon Creek Food Company Ltd.. It has a market capitalization of just CA$527k, and insiders have CA$117k 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
With a 40% ownership, the general public have some degree of sway over CYF. 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.
Private Company Ownership
Our data indicates that Private Companies hold 38%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks, for example - Canyon Creek Food has 4 warning signs (and 3 which are a bit concerning) we think you should know about.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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 email@example.com. 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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