Home Private Equity AdTheorent Holding Company, Inc. (NASDAQ:ADTH) surges 11%; private equity firms who own...

AdTheorent Holding Company, Inc. (NASDAQ:ADTH) surges 11%; private equity firms who own 47% shares profited along with institutions


Key Insights

  • The considerable ownership by private equity firms in AdTheorent Holding Company indicates that they collectively have a greater say in management and business strategy
  • A total of 3 investors have a majority stake in the company with 56% ownership
  • 15% of AdTheorent Holding Company is held by insiders

Every investor in AdTheorent Holding Company, Inc. (NASDAQ:ADTH) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private equity firms with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Private equity firms gained the most after market cap touched US$251m last week, while institutions who own 24% also benefitted.

Let’s delve deeper into each type of owner of AdTheorent Holding Company, beginning with the chart below.

Check out our latest analysis for AdTheorent Holding Company

NasdaqCM:ADTH Ownership Breakdown January 31st 2024

What Does The Institutional Ownership Tell Us About AdTheorent Holding Company?

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 AdTheorent Holding Company. 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 AdTheorent Holding Company’s historic earnings and revenue below, but keep in mind there’s always more to the story.

NasdaqCM:ADTH Earnings and Revenue Growth January 31st 2024

We note that hedge funds don’t have a meaningful investment in AdTheorent Holding Company. Our data shows that H.I.G. Growth Partners, LLC is the largest shareholder with 39% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.1% and 8.4% of the stock. Additionally, the company’s CEO James Lawson directly holds 1.5% of the total shares outstanding.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of AdTheorent Holding Company

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.

It seems insiders own a significant proportion of AdTheorent Holding Company, Inc.. It has a market capitalization of just US$251m, and insiders have US$38m worth of shares in their own names. 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 13% 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 Equity Ownership

Private equity firms hold a 47% stake in AdTheorent Holding Company. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand AdTheorent Holding Company better, we need to consider many other factors. Case in point: We’ve spotted 3 warning signs for AdTheorent Holding Company you should be aware of.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether AdTheorent Holding Company is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

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