Every investor in One World Lithium Inc. (CSE:OWLI) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in 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.
One World Lithium is a smaller company with a market capitalization of CA$7.3m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions are not on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about One World Lithium.
What Does The Lack Of Institutional Ownership Tell Us About One World Lithium?
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 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. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of One World Lithium, for yourself, below.
We note that hedge funds don’t have a meaningful investment in One World Lithium. From our data, we infer that the largest shareholder is John Hamilton (who also holds the title of Chief Financial Officer) with 10% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we’re glad to see a company insider play the role of a key stakeholder. The second largest shareholder with 0.1%, is Pamicon Developments Ltd, followed by Kevin Milledge, with an ownership of 0.06%. Interestingly, Kevin Milledge is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company’s top shareholders.
On studying our ownership data, we found that 4 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of One World Lithium
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 One World Lithium Inc.. It has a market capitalization of just CA$7.3m, and insiders have CA$744k 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, who are mostly retail investors, collectively hold 90% of One World Lithium shares. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
It’s always worth thinking about the different groups who own shares in a company. But to understand One World Lithium better, we need to consider many other factors. Be aware that One World Lithium is showing 5 warning signs in our investment analysis , and 2 of those shouldn’t be ignored…
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.
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