Key Insights

• Significant insider control over Innovative Solutions and Support implies vested interests in company growth
• 51% of the business is held by the top 8 shareholders
• Insiders have bought recently

If you want to know who really controls Innovative Solutions and Support, Inc. (NASDAQ:ISSC), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 34% to be precise, is individual insiders. 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$19m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Innovative Solutions and Support.

See our latest analysis for Innovative Solutions and Support

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

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.

We can see that Innovative Solutions and Support does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Innovative Solutions and Support's historic earnings and revenue below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 5.0% of Innovative Solutions and Support. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is Christopher Harborne, with ownership of 15%. With 9.6% and 6.1% of the shares outstanding respectively, Kevin Gilboy and Estate Of Geoffrey S. M. Hedrick are the second and third largest shareholders. Additionally, the company's CEO Shahram Askarpour directly holds 2.7% of the total shares outstanding.

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.

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. 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 an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our most recent data indicates that insiders own a reasonable proportion of Innovative Solutions and Support, Inc.. Insiders have a US$38m stake in this US$112m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

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.

Private Company Ownership

We can see that Private Companies own 6.1%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Innovative Solutions and Support is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

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.