Could The Clean Commodities Corp (CVE:CLE) Ownership Structure Tell Us Something Useful?

If you want to know who really controls Clean Commodities Corp (CVE:CLE), then you’ll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.’

Clean Commodities is not a large company by global standards. It has a market capitalization of CA$3.1m, which means it wouldn’t have the attention of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutional investors have not yet purchased shares. Let’s delve deeper into each type of owner, to discover more about CLE.

Check out our latest analysis for Clean Commodities

TSXV:CLE Ownership Summary December 7th 18
TSXV:CLE Ownership Summary December 7th 18

What Does The Lack Of Institutional Ownership Tell Us About Clean Commodities?

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 could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Clean Commodities’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.

TSXV:CLE Income Statement Export December 7th 18
TSXV:CLE Income Statement Export December 7th 18

We note that hedge funds don’t have a meaningful investment in Clean Commodities. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Clean Commodities

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 Clean Commodities Corp. It has a market capitalization of just CA$3.1m, and insiders have CA$391k worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are mostly retail investors, collectively hold 83% of Clean Commodities shares. 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.

Private Company Ownership

Our data indicates that Private Companies hold 4.4%, of the company’s shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it’s hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.