Large institutional owners of Inspired Entertainment, Inc. (NASDAQ: INSE ) must be happy as the stock continues to impress, gaining 11% in the past week

key insights

• Extremely high institutional ownership means Inspired Entertainment’s share price is sensitive to its trading behavior
• The top 10 shareholders hold 51% of the shares
• Ownership Research and Analyst Forecast Data Helps provide a good understanding of equity opportunities

Each investor in Inspired Entertainment, Inc. (NASDAQ: INSE) should know the most powerful shareholder group. Holding 65% of the shares, the institution holds the largest share of the company. In other words, the group will gain the most (or lose the most) from their investment in the company.

Last week’s 11% gain means institutional investors are on the positive end, even though the company has shown a strong long-term trend. The current one-year return to shareholders is 25%, and last week’s gains were just icing on the cake.

Let’s dive into each type of owner for Inspired Entertainment, starting with the table below.

Check out our latest analysis for Inspired Entertainment

What does institutional ownership tell us about Inspired Entertainment?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to the companies that are included in the main index.

As you can see, institutional investors own a significant amount of Inspired Entertainment. This can indicate that the company has some credibility in the investment community. However, it is best not to rely on hypothesis validation from institutional investors. They too, sometimes get it wrong. It is not uncommon for shares to drop sharply if two large institutional investors try to sell a stock at the same time. As such, it’s worth examining Inspired Entertainment’s past earnings trajectory (chart below). Of course, keep in mind that there are other factors to consider.

Investors should note that institutions effectively own more than half of the company, so collectively they can wield significant power. A 15% stake in Inspired Entertainment appears to be controlled by hedge funds. This caught my attention because hedge funds sometimes try to influence management or bring about changes that create near-term value for shareholders. Our data shows that Macquarie Group, Ltd., Banking & Securities Investments is the largest shareholder with 12% of the outstanding shares. 683 Capital Management, LLC and Cannell Capital LLC hold 8.0% and 6.7% of the outstanding shares respectively, and are the second and third largest shareholders. Additionally, we found that CEO Brooks Pierce has 0.8% of the shares allocated to their name.

We also observed that the top 10 shareholders accounted for more than half of the total share capital, and a small number of small shareholders balanced the interests of large shareholders to a certain extent.

Researching institutional ownership is a great way to measure and filter the expected performance of stocks. The same effect can be achieved by studying the analyst’s sentiment. Quite a few analysts cover the stock, so you can easily see forecast growth.

Insider Ownership of Inspired Entertainment

The definition of an insider may vary slightly in different countries, but board members always matter. Company management runs the business, but the CEO will be accountable to the board, even if he or she is a member of the board.

It is positive when insider ownership shows that leadership thinks like the real owners of the company. However, high insider ownership can also confer enormous power on a small group of people within the company. In some cases this can be negative.

Shareholders may be interested to know that insiders own shares of Inspired Entertainment, Inc. As individuals, insiders collectively own a $15 million stake in the $336 million company. This shows at least some consistency.you can Click here to see if these insiders have been buying or selling.

General public ownership

With 12 percent ownership, the public, mostly individual investors, has some leverage over Inspired Entertainment. This level of ownership, while substantial, may not be enough to change company policy if decisions are not in sync with other large shareholders.

private company ownership

Our data shows that private companies hold a 3.4% stake in the company. It’s hard to draw any conclusions from that fact alone, so it’s worth looking into who owns these private companies. Sometimes, insiders or other related parties hold equity interests in public companies through separate private companies.

Next step:

While it’s well worth considering the different groups that own a company, there are other, more important factors. Consider, for example, the ever-present specter of investment risk. We have identified 2 warning signs entertain with inspiration understanding them should be part of your investing process.

If you’d rather read what analysts are forecasting for future growth, don’t miss this free Analyst Forecast Report.

Note: Figures in this article are calculated using data from the trailing 12 months, which refers to the 12-month period ending on the last day of the month on which the financial statements are dated. This may not be consistent with the annual reported figures for the full year.

Have feedback on this article? Concerned about content? keep in touch Contact us directly. Alternatively, email the editorial team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We use only an unbiased methodology to provide reviews based on historical data and analyst forecasts, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no positions in any of the stocks mentioned.