Could Chicken Soup for the Soul Entertainment Inc’s (NASDAQ:CSSE) Investor Composition Influence The Stock Price?

Every investor in Chicken Soup for the Soul Entertainment Inc (NASDAQ:CSSE) 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 used to be publicly owned tend to have lower insider ownership.

Chicken Soup for the Soul Entertainment is a smaller company with a market capitalization of US$110m, so it may still be flying under the radar of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about CSSE.

View our latest analysis for Chicken Soup for the Soul Entertainment

NasdaqGM:CSSE Ownership Summary November 23rd 18
NasdaqGM:CSSE Ownership Summary November 23rd 18

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.

We can see that Chicken Soup for the Soul Entertainment does have institutional investors; and they hold 5.8% of the 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. 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.

NasdaqGM:CSSE Income Statement Export November 23rd 18
NasdaqGM:CSSE Income Statement Export November 23rd 18

It would appear that 5.3% of Chicken Soup for the Soul Entertainment shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. 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 company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can see that insiders own shares in Chicken Soup for the Soul Entertainment Inc. In their own names, insiders own US$2.5m worth of stock in the US$110m company. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

With a 21% ownership, the general public have some degree of sway over CSSE. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 66%, of the company’s shares. 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:

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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.