Crexendo, Inc. (NASDAQ:CXDO) insiders have had a fantastic week as stock increased 25%, and they haven't stopped buying
Key Insights
Significant insider control over Crexendo implies vested interests in company growth
The top 3 shareholders own 50% of the company
If you want to know who really controls Crexendo, Inc. (NASDAQ:CXDO), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 56% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
Insiders who purchased recently should be particularly happy after the stock gained 25% in the past week.
Let's take a closer look to see what the different types of shareholders can tell us about Crexendo.
View our latest analysis for Crexendo
What Does The Institutional Ownership Tell Us About Crexendo?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that Crexendo does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Crexendo's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Crexendo. Looking at our data, we can see that the largest shareholder is Steven Mihaylo with 42% of shares outstanding. With 5.6% and 2.3% 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. Additionally, the company's CEO Jeffrey Korn directly holds 0.9% of the total shares outstanding.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Crexendo
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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. That means they own US$58m worth of shares in the US$103m company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 31% 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.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Crexendo .
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com