Cerberus Cyber Sentinel Corporation's (NASDAQ:CISO) last week's 82% decline must have disappointed private companies who have a significant stake

By
Simply Wall St
Published
January 15, 2022
NasdaqCM:CISO
Source: Shutterstock

Every investor in Cerberus Cyber Sentinel Corporation (NASDAQ:CISO) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 82% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 24% stock also took a hit.

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

Check out our latest analysis for Cerberus Cyber Sentinel

ownership-breakdown
NasdaqCM:CISO Ownership Breakdown January 15th 2022

What Does The Lack Of Institutional Ownership Tell Us About Cerberus Cyber Sentinel?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Cerberus Cyber Sentinel, for yourself, below.

earnings-and-revenue-growth
NasdaqCM:CISO Earnings and Revenue Growth January 15th 2022

Cerberus Cyber Sentinel is not owned by hedge funds. The company's largest shareholder is Jemmett Enterprises, LLC, with ownership of 55%. This implies that they have majority interest control of the future of the company. Stephen Scott is the second largest shareholder owning 15% of common stock, and Baan Alsinawi holds about 5.4% of the company stock.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Cerberus Cyber Sentinel

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.

Our information suggests that insiders maintain a significant holding in Cerberus Cyber Sentinel Corporation. Insiders own US$1.4b worth of shares in the US$5.8b company. That's quite meaningful. 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

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. 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 55%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. For example, we've discovered 4 warning signs for Cerberus Cyber Sentinel (2 are potentially serious!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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