If you want to know who really controls PSI Software AG (ETR: PSAN), then you will have to look at the composition of its share register. Insiders often own a large portion of younger and smaller companies, while larger companies tend to have institutions as shareholders. Warren Buffett said he enjoys “a business with sustainable competitive advantages that is led by skilled, owner-oriented people.” So it’s nice to see some insider ownership as it may suggest that the management is owner-driven.
PSI Software is a small company with a market cap of 611 million euros, so it may still go under the radar of many institutional investors. Our analysis of company ownership, below, shows that institutional investors bought the company. Let’s take a closer look at what different types of shareholders can tell us about PSI Software.
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What does institutional ownership tell us about PSI software?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
PSI Software already has institutions on the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company with no history of growth. You can see PSI Software’s historical revenue and revenue below, but keep in mind that there is always more to tell.
PSI software is not owned by hedge funds. Investmentaktiengesellschaft FÜR Langfristige Investoren Tgv is currently the largest shareholder of the company with 21% of the shares outstanding. Harvinder Singh is the second largest shareholder holding 8.1% of the ordinary shares, and Baden-Württembergische Versorgungsanstalt für Ärzte, Zahnärzte und Tierärzte owns around 5.2% of the shares of the company.
Our studies suggest that the top 25 shareholders collectively control less than half of the shares of the company, which means that the shares of the company are widely disseminated and there is no dominant shareholder.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.
Insider Ownership of PSI Software
The definition of company insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Shareholders would likely be interested to learn that insiders hold shares in PSI Software AG. It has a market capitalization of just 611 million euros and insiders have 57 million euros of shares in their name. It shows at least some alignment. You can click here to see if these insiders have bought or sold.
General public property
The general public, including retail investors, own 55% of PSI Software. This level of ownership gives mainstream investors some power to influence key policy decisions such as board composition, executive compensation, and dividend payout ratio.
It’s always worth thinking about the different groups that own shares in a company. But to better understand PSI software, there are many other factors that we need to consider.
I like to dive deeper on the performance of a company in the past. You can access this interactive graphic past profits, income and cash flow, free of charge.
If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last day of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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