Insiders with their considerable ownership were the key benefactors as Crexendo, Inc. (NASDAQ:CXDO) touches US$125m market cap

Key Insights

• Crexendo's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 52% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Crexendo, Inc. (NASDAQ:CXDO) can tell us which group is most powerful. The group holding the most number of shares in the company, around 60% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 12% gain.

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

Check out our latest analysis for Crexendo

What Does The Institutional Ownership Tell Us About Crexendo?

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.

Crexendo already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Crexendo, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Crexendo. Steven Mihaylo is currently the largest shareholder, with 43% of shares outstanding. With 9.0% and 2.4% of the shares outstanding respectively, Bryan Dancer and Bard Associates Inc. are the second and third largest shareholders. Bryan Dancer, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive. Furthermore, CEO Jeffrey Korn is the owner of 0.9% of the company's shares.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Crexendo

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.

Our information suggests that insiders own more than half of Crexendo, Inc.. This gives them effective control of the company. Given it has a market cap of US$125m, that means they have US$75m 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, who are usually individual investors, hold a 30% stake in Crexendo. 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 Crexendo better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with Crexendo (including 1 which is concerning) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.