What Is The Ownership Structure Like For ServiceSource International, Inc. (NASDAQ:SREV)?
The big shareholder groups in ServiceSource International, Inc. (NASDAQ:SREV) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.
ServiceSource International is a smaller company with a market capitalization of US$112m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about ServiceSource International.
Check out our latest analysis for ServiceSource International
What Does The Institutional Ownership Tell Us About ServiceSource International?
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 have a fair amount of stake in ServiceSource International. 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 ServiceSource International's historic earnings and revenue below, but keep in mind there's always more to the story.
Our data indicates that hedge funds own 34% of ServiceSource International. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Our data shows that Edenbrook Capital Partners, LLC is the largest shareholder with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.9% and 8.6% of the stock. Additionally, the company's CEO Gary Moore directly holds 1.0% of the total shares outstanding.
On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.