Stock Analysis

Is iCAD, Inc.'s (NASDAQ:ICAD) Shareholder Ownership Skewed Towards Insiders?

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NasdaqCM:ICAD
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A look at the shareholders of iCAD, Inc. (NASDAQ:ICAD) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

With a market capitalization of US$446m, iCAD is a small cap stock, so it might not be well known by 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 iCAD.

See our latest analysis for iCAD

ownership-breakdown
NasdaqCM:ICAD Ownership Breakdown March 2nd 2021

What Does The Institutional Ownership Tell Us About iCAD?

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.

We can see that iCAD does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 iCAD's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqCM:ICAD Earnings and Revenue Growth March 2nd 2021

We note that hedge funds don't have a meaningful investment in iCAD. Our data shows that BlackRock, Inc. is the largest shareholder with 6.2% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.6% and 4.9%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 25 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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

Insider Ownership Of iCAD

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders maintain a significant holding in iCAD, Inc.. It has a market capitalization of just US$446m, and insiders have US$47m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 39% ownership, the general public have some degree of sway over iCAD. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for iCAD you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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