Key Insights

• Significant control over Allot by individual investors implies that the general public has more power to influence management and governance-related decisions

• A total of 9 investors have a majority stake in the company with 51% ownership

• 28% of Allot is held by Institutions

Every investor in Allot Ltd. (NASDAQ:ALLT) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 41% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, individual investors benefitted the most after the company's market cap rose by US$22m last week.

In the chart below, we zoom in on the different ownership groups of Allot.

Check out our latest analysis for Allot

What Does The Institutional Ownership Tell Us About Allot?

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.

Allot already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Allot, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 30% of Allot. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Lynrock Lake LP is currently the largest shareholder, with 23% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.7% and 5.5% of the stock.

On further inspection, we found that more than half the company's shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.