Individual investors who hold 48% of AMMO, Inc. (NASDAQ:POWW) gained 20%, institutions profited as well

Key Insights

• Significant control over AMMO by individual investors implies that the general public has more power to influence management and governance-related decisions
• 47% of the business is held by the top 25 shareholders
• Insiders own 25% of AMMO

To get a sense of who is truly in control of AMMO, Inc. (NASDAQ:POWW), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 48% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 20% increase in the stock price last week, individual investors profited the most, but institutions who own 27% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of AMMO.

Check out our latest analysis for AMMO

What Does The Institutional Ownership Tell Us About AMMO?

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.

We can see that AMMO does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 AMMO's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in AMMO. Looking at our data, we can see that the largest shareholder is Steven Urvan with 17% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.0% and 4.9% of the stock. Fred Wagenhals, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of AMMO

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own a reasonable proportion of AMMO, Inc.. It has a market capitalization of just US$198m, and insiders have US$49m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 48% stake in AMMO. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand AMMO better, we need to consider many other factors. Take risks for example - AMMO 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.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com