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If you want to know who really controls Perion Network Ltd. ( NASDAQ:PERI ), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
With a market capitalization of US$191m, Perion Network is a small-cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Perion Network.
What Does The Institutional Ownership Tell Us About Perion Network?
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.
Perion Network 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 Perion Network, (below). Of course, keep in mind that there are other factors to consider, too.
Our data indicates that hedge funds own 7.3% of Perion Network. That's interesting because hedge funds can be quite active and activist. Many look for medium-term catalysts that will drive the share price higher. Benchmark is currently the largest shareholder, with 12% of shares outstanding. For context, the second-largest shareholder holds about 8.0% of the shares outstanding, followed by ownership of 7.3% by the third-largest shareholder.
On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Perion Network
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions, too much power is concentrated within this group.
Our most recent data indicates that insiders own a reasonable proportion of Perion Network Ltd. Insiders own US$36m worth of shares in the US$191m company. It is great to see insiders so invested in the business.
General Public Ownership
With a 37% ownership, the general public have some degree of sway over Perion Network. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
Private equity firms hold a 12% stake in Perion Network. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking, they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
It's always worth thinking about the different groups who own shares in a company. But to understand Perion Network better, we need to consider many other factors. Be aware that Perion Network is showing 3 warning signs in our investment analysis, you should know about...
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.