Could The Subscribe Technologies Inc (CNSX:SAAS) Ownership Structure Tell Us Something Useful?

A look at the shareholders of Subscribe Technologies Inc (CNSX:SAAS) can tell us which group is most powerful. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of 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.’

Subscribe Technologies is not a large company by global standards. It has a market capitalization of CA$4m, which means it wouldn’t have the attention of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems 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 SAAS.

View our latest analysis for Subscribe Technologies

CNSX:SAAS Ownership Summary November 7th 18
CNSX:SAAS Ownership Summary November 7th 18

What Does The Lack Of Institutional Ownership Tell Us About Subscribe Technologies?

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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Subscribe Technologies’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:SAAS Income Statement Export November 7th 18
CNSX:SAAS Income Statement Export November 7th 18

Subscribe Technologies is not owned by hedge funds. 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 Subscribe Technologies

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.

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 information suggests that insiders maintain a significant holding in Subscribe Technologies Inc. Insiders own CA$884k worth of shares in the CA$4m 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 — mostly retail investors — own 79% of Subscribe Technologies . This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

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 find historic revenue and earnings in this detailed graph.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.