Do Institutions Own Cannabis One Holdings Inc. (CSE:CBIS) Shares?

By
Simply Wall St
Published
March 04, 2020
CNSX:IDVR

If you want to know who really controls Cannabis One Holdings Inc. (CSE:CBIS), 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. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Cannabis One Holdings is a smaller company with a market capitalization of CA$9.0m, 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 Cannabis One Holdings.

View our latest analysis for Cannabis One Holdings

CNSX:CBIS Ownership Summary, March 4th 2020
CNSX:CBIS Ownership Summary, March 4th 2020

What Does The Lack Of Institutional Ownership Tell Us About Cannabis One Holdings?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

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. 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 Cannabis One Holdings, for yourself, below.

CNSX:CBIS Income Statement, March 4th 2020
CNSX:CBIS Income Statement, March 4th 2020

We note that hedge funds don't have a meaningful investment in Cannabis One Holdings. Looking at our data, we can see that the largest shareholder is the CEO Jeffery Mascio with 9.0% of shares outstanding. The second and third largest shareholders are Patrick Rinker and Bradley Harris, holding 0.9% and 0.7%, respectively. Interestingly, Bradley Harris 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 8 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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Cannabis One Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Cannabis One Holdings Inc.. Insiders own CA$993k worth of shares in the CA$9.0m company. 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 89% of Cannabis One Holdings shares. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

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. For instance, we've identified 6 warning signs for Cannabis One Holdings (1 is concerning) that you should be aware of.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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