Key Insights

• Advantage Solutions' significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is Leonard Green & Partners, L.P. with a 56% stake
• Insiders have bought recently

A look at the shareholders of Advantage Solutions Inc. (NASDAQ:ADV) can tell us which group is most powerful. With 56% stake, private equity firms possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.1% decrease in the stock price last week, private equity firms suffered the most losses, but institutions who own 31% stock also took a hit.

Let's delve deeper into each type of owner of Advantage Solutions, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Advantage Solutions?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Advantage Solutions. 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. 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 Advantage Solutions' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Advantage Solutions. Our data shows that Leonard Green & Partners, L.P. is the largest shareholder with 56% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 4.9% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder. Additionally, the company's CEO David Peacock directly holds 0.6% of the total shares outstanding.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Advantage Solutions

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 some shares in Advantage Solutions Inc.. In their own names, insiders own US$20m worth of stock in the US$994m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Advantage Solutions. 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 56% stake in Advantage Solutions. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Advantage Solutions better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.