Long-term and short-term performance of a stock is often linked to a company’s ownership structure. However, not all investments have equal implications. With this in mind, let’s take a look at the CobalTech Mining Inc. (TSXV:$CSK:CA) ownership structure.

The general public owns a significant 75.74% of CobalTech’s stock. This high percentage of ownership will give shareholders a bigger say in the company’s direction. Decisions may include acquisitions of businesses, executive compensation, and appointment of directors. For an investor who wants to be involved in making key company decisions, this scenario is ideal.

Institutional ownership can often cause significant impact to share prices. Since they buy and sell in large quantities, they can often drive prices up or down with their decisions. In the case of CobalTech, there is almost no institutional ownership. This can signal that there is limited concern about the influence of institutional block trades affecting stock price.

It is also important to consider insiders. Though insider trades are not a guarantee of a trend, the stockholders have a personal interest in the stock performing based on their ownership. CobalTech currently has 10.82% insider ownership, which is large enough to impact shareholder returns. Insider numbers this high tend to positively affect companies that outperform and negatively affect companies that underperform. It’s also important to look at the direction of insider trades. Although insiders buying stock is generally a sign of faith in a positive trend, selling stock may not necessarily indicate an incoming downswing, as insiders may be selling to meet a personal financial need.

Public companies currently have a 13.13% stake in the mining company. These sorts of investments are made primarily because of strategic and capital gain interests. Because of public companies’ ability to strategically influence the direction of a company, it is important to research what sort of public partnerships the potential investment has before investing.

The bottom line is that with CobalTech’s particular ownership structure, the company is less likely to see significant volatility from institutional block trades, or sustained downtrends.

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