Could The Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) Ownership Structure Tell Us Something Useful?
If you want to know who really controls Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.
Chicken Soup for the Soul Entertainment is a smaller company with a market capitalization of US$332m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Chicken Soup for the Soul Entertainment.
Check out our latest analysis for Chicken Soup for the Soul Entertainment
What Does The Institutional Ownership Tell Us About Chicken Soup for the Soul Entertainment?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Chicken Soup for the Soul Entertainment already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Chicken Soup for the Soul Entertainment, (below). Of course, keep in mind that there are other factors to consider, too.
Chicken Soup for the Soul Entertainment is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Chicken Soup for the Soul Holdings, LLC with 60% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Royce & Associates, LP is the second largest shareholder owning 4.0% of common stock, and Greenhaven Road Investment Management, LP holds about 3.4% of the company stock. Furthermore, CEO William Rouhana is the owner of 1.3% of the company's shares.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Chicken Soup for the Soul Entertainment
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
I can report that insiders do own shares in Chicken Soup for the Soul Entertainment, Inc.. It has a market capitalization of just US$332m, and insiders have US$11m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, with a 22% 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 55%, of the Chicken Soup for the Soul Entertainment 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Chicken Soup for the Soul Entertainment better, we need to consider many other factors. For example, we've discovered 3 warning signs for Chicken Soup for the Soul Entertainment that you should be aware of before investing here.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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