Castle Brands Board (ROX)

[FUNMAN]

Do Insiders Own Shares In Castle Brands Inc. (NYSEMKT:ROX)?


Simply Wall St July 26, 2019


This would be such a better article (and all of the others that touch on this), if the bloggers would at least open the web page and see that Dr. Phillip Frost is a director.


Copy and paste this link to your browser:
investor.castlebrandsinc.com/corporate-governance/board-of-directors



Then maybe they would open the proxy and see all of the insiders who own a significant number of shares, including Dr Frost. For the record he owns 54,221,285 shares or 32.1% of the O/S.


https://www.sec.gov/Archives/edgar/data/1311538/000149315219000932/def14a.htm


It makes it so hard to believe these bloggers when they miss such basic facts. They pay no attention to the company, and write blogs off of metrics that aren't even accurate.

Then they try to sway investors as if they are authorities on the company.

Quite frankly, I think of them as inept who know much less about the company than we do.

Here's the article that totally misses the mark on the main point of the blog.





The big shareholder groups in Castle Brands Inc. (NYSEMKT:ROX) have power over the company. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.’

Castle Brands is a smaller company with a market capitalization of US$90m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let’s delve deeper into each type of owner, to discover more about ROX.


What Does The Institutional Ownership Tell Us About Castle Brands?
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.

Castle Brands already has institutions on the share registry. Indeed, they own 12% of the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Castle Brands, (below). Of course, keep in mind that there are other factors to consider, too.



Hedge funds don’t have many shares in Castle Brands. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Castle Brands
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can see that insiders own shares in Castle Brands Inc.. In their own names, insiders own US$6.9m worth of stock in the US$90m company. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership
The general public holds a 41% stake in ROX. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership
With an ownership of 5.6%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership
Our data indicates that Private Companies hold 26%, of the company’s shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership
We can see that public companies hold 7.7%, of the ROX shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.