A look at the shareholders of CFOAM Limited (ASX:CFO) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes “a business with enduring competitive advantages that is run by able and owner-oriented people.” So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.
With a market capitalization of AU$7.5m, CFOAM is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions are not really that prevalent on the share registry. Let’s delve deeper into each type of owner, to discover more about CFOAM.
View our latest analysis for CFOAM
ASX:CFO Ownership Summary May 19th 2020What Does The Institutional Ownership Tell Us About CFOAM?
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.
Institutions own less than 5% of CFOAM. That indicates that the company is on the radar of some funds, but it isn’t particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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.
ASX:CFO Income Statement May 19th 2020We note that hedge funds don’t have a meaningful investment in CFOAM. Muhammad Qubbaj is currently the company’s largest shareholder with 12% of shares outstanding. Drake Special Situations Llc is the second largest shareholder with 6.4% of common stock, followed by Michael Placha, holding 6.2% of the stock.
On studying the facts and figures more closely, we found that 10 of the top shareholders account for 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of CFOAM
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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 CFOAM Limited. It has a market capitalization of just AU$7.5m, and insiders have AU$3.4m worth of shares in their own names. 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, with a 41% stake in the company, will not easily be ignored. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
It seems that Private Companies own 8.4%, of the CFO stock. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
