Could Curaleaf Holdings, Inc.’s (CNSX:CURA) Investor Composition Influence The Stock Price?

If you want to know who really controls Curaleaf Holdings, Inc. (CNSX:CURA), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of 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.’

Curaleaf Holdings is a pretty big company. It has a market capitalization of CA$4.5b. Normally institutions would own a significant portion of a company this size. In the chart below below, we can see that institutions don’t own many shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about CURA.

See our latest analysis for Curaleaf Holdings

CNSX:CURA Ownership Summary, August 15th 2019
CNSX:CURA Ownership Summary, August 15th 2019

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

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 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. Curaleaf Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

CNSX:CURA Income Statement, August 15th 2019
CNSX:CURA Income Statement, August 15th 2019

We note that hedge funds don’t have a meaningful investment in Curaleaf Holdings. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Curaleaf Holdings

The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

It seems that insiders own more than half the Curaleaf Holdings, Inc. stock. This gives them a lot of power. Insiders own CA$2.4b worth of shares in the CA$4.5b company. That’s extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, with a 42% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 3.8%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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.

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. Thank you for reading.