Chicken Soup for the Soul Entertainment, Inc.’s (NASDAQ:CSSE) market cap touched US$143m last week, benefiting both private companies who own 39% as well as institutions

Every investor in Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While private companies were the group that benefitted the most from last week’s US$15m market cap gain, institutions too had a 23% share in those profits.

Let’s delve deeper into each type of owner of Chicken Soup for the Soul Entertainment, beginning with the chart below.

Check out the opportunities and risks within the US Entertainment industry.

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NasdaqGM:CSSE Ownership Breakdown November 13th 2022

What Does The Institutional Ownership Tell Us About Chicken Soup for the Soul Entertainment?

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.

As you can see, institutional investors have a fair amount of stake in Chicken Soup for the Soul Entertainment. 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.

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NasdaqGM:CSSE Earnings and Revenue Growth November 13th 2022

Chicken Soup for the Soul Entertainment is not owned by hedge funds. Chicken Soup for the Soul Holdings, LLC is currently the company’s largest shareholder with 39% of shares outstanding. With 17% and 5.7% of the shares outstanding respectively, Apollo Global Management, Inc. and Granahan Investment Management, LLC are the second and third largest shareholders. Furthermore, CEO William Rouhana is the owner of 1.6% of the company’s shares.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.

Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Chicken Soup for the Soul Entertainment

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.

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.

We can report that insiders do own shares in Chicken Soup for the Soul Entertainment, Inc.. It has a market capitalization of just US$143m, and insiders have US$6.1m worth of shares, in their own names. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chicken Soup for the Soul Entertainment. 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 a stake of 17%, private equity firms could influence the Chicken Soup for the Soul Entertainment board. 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

It seems that Private Companies own 39%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example – Chicken Soup for the Soul Entertainment has 2 warning signs we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

Valuation is complex, but we’re helping make it simple.

Find out whether Chicken Soup for the Soul Entertainment is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology 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 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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