Is Esports Entertainment Group, Inc. (NASDAQ:GMBL) Popular Amongst Institutions?

By
Simply Wall St
Published
August 10, 2021
NasdaqCM:GMBL
Source: Shutterstock

Every investor in Esports Entertainment Group, Inc. (NASDAQ:GMBL) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

Esports Entertainment Group is not a large company by global standards. It has a market capitalization of US$203m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Esports Entertainment Group.

View our latest analysis for Esports Entertainment Group

ownership-breakdown
NasdaqCM:GMBL Ownership Breakdown August 11th 2021

What Does The Institutional Ownership Tell Us About Esports Entertainment Group?

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.

As you can see, institutional investors have a fair amount of stake in Esports Entertainment Group. 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 Esports Entertainment Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqCM:GMBL Earnings and Revenue Growth August 11th 2021

Hedge funds don't have many shares in Esports Entertainment Group. Second Generation Holding Trust is currently the largest shareholder, with 16% of shares outstanding. Bluerock Real Estate Associates, Llc is the second largest shareholder owning 5.0% of common stock, and Soviero Asset Management, LP holds about 3.0% of the company stock.

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.

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 Esports Entertainment Group

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. 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.

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.

I can report that insiders do own shares in Esports Entertainment Group, Inc.. It has a market capitalization of just US$203m, and insiders have US$7.1m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a substantial 60% stake in Esports Entertainment Group, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 22%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Esports Entertainment Group you should be aware of, and 1 of them is significant.

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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