Positive week for Digital Turbine, Inc. (NASDAQ:APPS) institutional investors who lost 47% over the past year

Key Insights

• Institutions' substantial holdings in Digital Turbine implies that they have significant influence over the company's share price
• The top 25 shareholders own 49% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Digital Turbine, Inc. (NASDAQ:APPS) should be aware of the most powerful shareholder groups. With 52% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week's US$37m market cap gain would probably be appreciated by institutional investors, especially after a year of 47% losses.

Let's take a closer look to see what the different types of shareholders can tell us about Digital Turbine.

View our latest analysis for Digital Turbine

What Does The Institutional Ownership Tell Us About Digital Turbine?

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.

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

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Digital Turbine. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 8.1% of shares outstanding. With 6.6% and 5.9% of the shares outstanding respectively, BlackRock, Inc. and Tennor Holding B.V. are the second and third largest shareholders. In addition, we found that William Stone, the CEO has 1.5% of the shares allocated to their name.

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 Digital Turbine

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Digital Turbine, Inc.. As individuals, the insiders collectively own US$15m worth of the US$311m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Digital Turbine. 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.

Private Equity Ownership

Private equity firms hold a 5.9% stake in Digital Turbine. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

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 Digital Turbine you should be aware of, and 1 of them makes us a bit uncomfortable.

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.

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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.