Individual investors invested in Curaleaf Holdings, Inc. (CSE:CURA) copped the brunt of last week's CA$1.1b market cap decline

By
Simply Wall St
Published
February 24, 2022
CNSX:CURA
Source: Shutterstock

Every investor in Curaleaf Holdings, Inc. (CSE:CURA) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders, who own 39% shares weren’t spared from last week’s CA$1.1b market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Curaleaf Holdings.

Check out our latest analysis for Curaleaf Holdings

ownership-breakdown
CNSX:CURA Ownership Breakdown February 24th 2022

What Does The Institutional Ownership Tell Us About Curaleaf Holdings?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Since institutions own only a small portion of Curaleaf Holdings, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth
CNSX:CURA Earnings and Revenue Growth February 24th 2022

Curaleaf Holdings is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Curaleaf Holdings' case, its Top Key Executive, Boris Jordan, is the largest shareholder, holding 18% of shares outstanding. Andrey Blokh is the second largest shareholder owning 18% of common stock, and Bellmawr Investors, LLC holds about 1.8% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Curaleaf Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Curaleaf Holdings, Inc.. It is very interesting to see that insiders have a meaningful CA$2.7b stake in this CA$6.8b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 58% of Curaleaf Holdings shares. With this amount 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 vote on acquisitions or mergers 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 2 warning signs for Curaleaf Holdings that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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