Insiders of Alliance Entertainment Holding Corporation (NASDAQ:AENT) have had a great week after last week's US$46m gain and they haven't stopped buying

Key Insights

• Insiders appear to have a vested interest in Alliance Entertainment Holding's growth, as seen by their sizeable ownership
• 75% of the business is held by the top 2 shareholders
• Insiders have been buying lately

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If you want to know who really controls Alliance Entertainment Holding Corporation (NASDAQ:AENT), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 77% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Having purchased shares recently, insiders must be glad after market cap hit US$282m last week.

Let's delve deeper into each type of owner of Alliance Entertainment Holding, beginning with the chart below.

Check out our latest analysis for Alliance Entertainment Holding

What Does The Institutional Ownership Tell Us About Alliance Entertainment Holding?

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.

Since institutions own only a small portion of Alliance Entertainment Holding, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Alliance Entertainment Holding. Looking at our data, we can see that the largest shareholder is the CEO Jeffrey Walker with 45% of shares outstanding. In comparison, the second and third largest shareholders hold about 30% and 1.2% of the stock. Note that two of the top three shareholders are also Top Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Alliance Entertainment Holding

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems that insiders own more than half the Alliance Entertainment Holding Corporation stock. This gives them a lot of power. Given it has a market cap of US$282m, that means they have US$217m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. 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 Alliance Entertainment Holding better, we need to consider many other factors. For example, we've discovered 2 warning signs for Alliance Entertainment Holding (1 is significant!) that you should be aware of before investing here.

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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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.