Tim Cook, Salem Media Group, Inc.'s (NASDAQ:SALM) Top Key Executive Edward Atsinger is the most bullish insider, and their stock value gained 11% last week

By
Simply Wall St
Published
February 16, 2022
NasdaqGM:SALM
Source: Shutterstock

To get a sense of who is truly in control of Salem Media Group, Inc. (NASDAQ:SALM), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by US$11m last week.

Let's delve deeper into each type of owner of Salem Media Group, beginning with the chart below.

View our latest analysis for Salem Media Group

ownership-breakdown
NasdaqGM:SALM Ownership Breakdown February 16th 2022

What Does The Institutional Ownership Tell Us About Salem Media Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Salem Media Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Salem Media Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGM:SALM Earnings and Revenue Growth February 16th 2022

We note that hedge funds don't have a meaningful investment in Salem Media Group. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Salem Media Group's case, its Top Key Executive, Edward Atsinger, is the largest shareholder, holding 30% of shares outstanding. Stuart Epperson is the second largest shareholder owning 23% of common stock, and Edward Atsinger holds about 4.1% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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 Salem Media Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Salem Media Group, Inc. stock. This gives them a lot of power. So they have a US$65m stake in this US$111m 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

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Salem Media Group. 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 Salem Media Group better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with Salem Media Group (including 2 which are potentially serious) .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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