The big shareholder groups in Transaction Solutions International Limited (ASX:TSN) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.’
Transaction Solutions International is not a large company by global standards. It has a market capitalization of AU$15m, which means it wouldn’t have the attention of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutional investors have not yet purchased shares. Let’s take a closer look to see what the different types of shareholder can tell us about TSN.
View our latest analysis for Transaction Solutions International
What Does The Lack Of Institutional Ownership Tell Us About Transaction Solutions International?
Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.
There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Transaction Solutions International might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Transaction Solutions International is not owned by hedge funds. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Transaction Solutions International
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders maintain a significant holding in Transaction Solutions International Limited. Insiders have a AU$5m stake in this AU$15m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.