Could The Cleveland BioLabs, Inc. (NASDAQ:CBLI) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
February 03, 2020

Every investor in Cleveland BioLabs, Inc. (NASDAQ:CBLI) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.

Cleveland BioLabs is not a large company by global standards. It has a market capitalization of US$48m, which means it wouldn't have the attention of many institutional investors. In the chart 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 Cleveland BioLabs.

See our latest analysis for Cleveland BioLabs

NasdaqCM:CBLI Ownership Summary, February 3rd 2020

What Does The Institutional Ownership Tell Us About Cleveland BioLabs?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Less than 5% of Cleveland BioLabs is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

NasdaqCM:CBLI Income Statement, February 3rd 2020

Cleveland BioLabs is not owned by hedge funds. Renaissance Technologies Corp. is currently the largest shareholder, with 2.7% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder with 0.5% of common stock, followed by Citadel Advisors, LLC, holding 0.3% of the stock.

Our studies suggest that the top 11 shareholders collectively control less than 50% of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Cleveland BioLabs

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Cleveland BioLabs, Inc. stock. This gives them a lot of power. That means they own US$31m worth of shares in the US$48m company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 31% stake in CBLI. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks, for example - Cleveland BioLabs has 6 warning signs (and 3 which are a bit unpleasant) we think you should know about.

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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