Do Insiders Own Lots Of Shares In eXp World Holdings, Inc. (NASDAQ:EXPI)?

Every investor in eXp World Holdings, Inc. (NASDAQ:EXPI) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.

eXp World Holdings has a market capitalization of US$816m, so we would expect some institutional investors to have noticed the stock. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about eXp World Holdings.

See our latest analysis for eXp World Holdings

NasdaqGM:EXPI Ownership Summary June 10th 2020
NasdaqGM:EXPI Ownership Summary June 10th 2020

What Does The Institutional Ownership Tell Us About eXp World Holdings?

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 own 12% of eXp World Holdings. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at eXp World Holdings’s earnings history, below. Of course, the future is what really matters.

NasdaqGM:EXPI Income Statement June 10th 2020
NasdaqGM:EXPI Income Statement June 10th 2020

eXp World Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Glenn Sanford with 31% of shares outstanding. Next, we have Penny Sanford and Eugene Frederick as the second and third largest shareholders, holding 23% and 3.5%, of the shares outstanding, respectively. Interestingly, Eugene Frederick is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company’s top shareholders.

Additionally, we found that 2 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of eXp World Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of eXp World Holdings, Inc.. This gives them effective control of the company. So they have a US$491m stake in this US$816m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, with a 28% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we’ve spotted with eXp World Holdings .

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.

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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. Thank you for reading.