Nubeva Technologies Ltd.'s (CVE:NBVA) market cap rose CA$24m last week; individual investors who hold 58% profited and so did insiders

By
Simply Wall St
Published
January 18, 2022
TSXV:NBVA
Source: Shutterstock

Every investor in Nubeva Technologies Ltd. (CVE:NBVA) should be aware of the most powerful shareholder groups. With 58% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 18% increase in the stock price last week, individual investors profited the most, but insiders who own 35% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Nubeva Technologies, beginning with the chart below.

View our latest analysis for Nubeva Technologies

ownership-breakdown
TSXV:NBVA Ownership Breakdown January 18th 2022

What Does The Institutional Ownership Tell Us About Nubeva Technologies?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Nubeva Technologies does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Nubeva Technologies' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TSXV:NBVA Earnings and Revenue Growth January 18th 2022

We note that hedge funds don't have a meaningful investment in Nubeva Technologies. With a 27% stake, CEO Randy Chou is the largest shareholder. For context, the second largest shareholder holds about 6.7% of the shares outstanding, followed by an ownership of 5.5% by the third-largest shareholder. Interestingly, the third-largest shareholder, Greig Bannister is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

Our studies suggest that the top 5 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. 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 Nubeva 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.

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 insiders own a significant proportion of Nubeva Technologies Ltd.. Insiders have a CA$57m stake in this CA$160m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 58% of Nubeva Technologies. This level of ownership gives investors from the wider public some 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Nubeva Technologies , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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