Could Benchmark Botanics Inc.’s (CNSX:BBT) Investor Composition Influence The Stock Price?

A look at the shareholders of Benchmark Botanics Inc. (CNSX:BBT) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. 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.’

Benchmark Botanics is a smaller company with a market capitalization of CA$47m, so it may still be flying under the radar 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. We can zoom in on the different ownership groups, to learn more about BBT.

Check out our latest analysis for Benchmark Botanics

CNSX:BBT Ownership Summary December 13th 18
CNSX:BBT Ownership Summary December 13th 18

What Does The Lack Of Institutional Ownership Tell Us About Benchmark Botanics?

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

CNSX:BBT Income Statement Export December 13th 18
CNSX:BBT Income Statement Export December 13th 18

We note that hedge funds don’t have a meaningful investment in Benchmark Botanics. 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 Benchmark Botanics

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.

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.

Our information suggests that insiders maintain a significant holding in Benchmark Botanics Inc.. It has a market capitalization of just CA$47m, and insiders have CA$13m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are mostly retail investors, collectively hold 72% of Benchmark Botanics 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.

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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.