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Who Owns Innovative Solutions and Support Inc (NASDAQ:ISSC)?

Every investor in Innovative Solutions and Support Inc (NASDAQ:ISSC) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’

With a market capitalization of US$42.8m, Innovative Solutions and Support is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about ISSC.

View our latest analysis for Innovative Solutions and Support

NasdaqGS:ISSC Ownership Summary October 1st 18
NasdaqGS:ISSC Ownership Summary October 1st 18

What Does The Institutional Ownership Tell Us About Innovative Solutions and Support?

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.

As you can see, institutional investors own 24.9% of Innovative Solutions and Support. 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. 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 Innovative Solutions and Support, (below). Of course, keep in mind that there are other factors to consider, too.

NasdaqGS:ISSC Income Statement Export October 1st 18
NasdaqGS:ISSC Income Statement Export October 1st 18

Our data indicates that hedge funds own 5.2% of Innovative Solutions and Support. 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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Innovative Solutions and Support

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Innovative Solutions and Support Inc. It has a market capitalization of just US$42.8m, and insiders have US$14.3m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 36.5% ownership, the general public have some degree of sway over ISSC. 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:

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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

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