Key Insights

• Significant insider control over Alliance Entertainment Holding implies vested interests in company growth
• The top 2 shareholders own 75% of the company
• Recent purchases by insiders

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If you want to know who really controls Alliance Entertainment Holding Corporation (NASDAQ:AENT), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 77% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

It's interesting to note that insiders have been buying shares recently. This could signal that stock prices could go up and insiders are here for it.

In the chart below, we zoom in on the different ownership groups of Alliance Entertainment Holding.

Check out our latest analysis for Alliance Entertainment Holding

What Does The Institutional Ownership Tell Us About Alliance Entertainment Holding?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Less than 5% of Alliance Entertainment Holding is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Alliance Entertainment Holding. Looking at our data, we can see that the largest shareholder is the CEO Jeffrey Walker with 45% of shares outstanding. With 30% and 1.2% of the shares outstanding respectively, Bruce Ogilvie and W. Donaldson are the second and third largest shareholders. Note that two of the top three shareholders are also Top Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

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 75% stake.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Alliance Entertainment Holding

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders own more than half of Alliance Entertainment Holding Corporation. This gives them effective control of the company. So they have a US$157m stake in this US$204m business. 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 22% 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:

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. Case in point: We've spotted 3 warning signs for Alliance Entertainment Holding you should be aware of, and 2 of them are significant.

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.

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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.