The big shareholder groups in Integrated Payment Technologies Limited (ASX:IP1) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.’
Integrated Payment Technologies is a smaller company with a market capitalization of AU$4.0m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about IP1.
View our latest analysis for Integrated Payment Technologies
What Does The Institutional Ownership Tell Us About Integrated Payment Technologies?
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.
Integrated Payment Technologies already has institutions on the share registry. Indeed, they own 16% of the company. 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. 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 Integrated Payment Technologies, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don’t have a meaningful investment in Integrated Payment Technologies. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Integrated Payment Technologies
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems insiders own a significant proportion of Integrated Payment Technologies Limited. Insiders own AU$947k worth of shares in the AU$4.0m company. 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.