Crexendo, Inc. (NASDAQ:CXDO) insiders have had a fantastic week as stock increased 11%, and they haven't stopped buying
Key Insights
Significant insider control over Crexendo implies vested interests in company growth
The top 2 shareholders own 53% of the company
Every investor in Crexendo, Inc. (NASDAQ:CXDO) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Our data shows that insiders recently bought shares in the company and they were rewarded after market cap rose US$12m last week.
Let's delve deeper into each type of owner of Crexendo, beginning with the chart below.
See 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.
Crexendo already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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.
Hedge funds don't have many shares in Crexendo. From our data, we infer that the largest shareholder is Steven Mihaylo (who also holds the title of Top Key Executive) with 43% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 9.5% and 2.4% of the shares outstanding respectively, Bryan Dancer and Bard Associates Inc. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Bryan Dancer is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders. 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 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.
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
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own the majority of Crexendo, Inc.. This means they can collectively make decisions for the company. Given it has a market cap of US$126m, that means they have US$77m worth of shares. 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 30% 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. Take risks for example - Crexendo has 3 warning signs we think you should be aware of.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
