Updated: Mar 2, 2022
When evaluating a publicly traded company, one way to determine its upside potential is its share structure. The first aspect we look at is the Public Float, which is how many shares are available in the open market to be traded. It is important to note the number of shares authorized (how much the company can issue), and outstanding (what has been issued). With this information, we can make our initial read about both long term and short term possibilities, even before evaluating the company itself.
The attached example is of Small Business Development Group, Inc. (Stock Symbol: SBDG) where we have constructed a scenario of a public company that has a really "tight" public float, and a conservative authorized and issued structure. We believe this structure gives SBDG shareholders considerable upside.