Stock Analysis

What Percentage Of NanoXplore Inc. (CVE:GRA) Shares Do Insiders Own?

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TSX:GRA
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Every investor in NanoXplore Inc. (CVE:GRA) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.

NanoXplore is not a large company by global standards. It has a market capitalization of CA$514m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about NanoXplore.

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ownership-breakdown
TSXV:GRA Ownership Breakdown December 24th 2020

What Does The Institutional Ownership Tell Us About NanoXplore?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in NanoXplore. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of NanoXplore, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
TSXV:GRA Earnings and Revenue Growth December 24th 2020

We note that hedge funds don't have a meaningful investment in NanoXplore. Martinrea International Inc. is currently the company's largest shareholder with 23% of shares outstanding. For context, the second largest shareholder holds about 9.0% of the shares outstanding, followed by an ownership of 8.8% by the third-largest shareholder. Soroush Nazarpour, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On studying our ownership data, we found that 13 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of NanoXplore

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in NanoXplore Inc.. As individuals, the insiders collectively own CA$49m worth of the CA$514m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- mostly retail investors -- own 53% of NanoXplore. 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.

Public Company Ownership

It appears to us that public companies own 23% of NanoXplore. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand NanoXplore better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for NanoXplore (of which 1 is significant!) you should know about.

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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