While institutions own 34% of PSI Software SE (ETR:PSAN), individual investors are its largest shareholders with 40% ownership
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
Significant control over PSI Software by individual investors implies that the general public has more power to influence management and governance-related decisions
Every investor in PSI Software SE (ETR:PSAN) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 34% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let's delve deeper into each type of owner of PSI Software, beginning with the chart below.
What Does The Institutional Ownership Tell Us About PSI Software?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that PSI Software does have institutional investors; and they hold a good portion of the company's stock. 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. 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 PSI Software, (below). Of course, keep in mind that there are other factors to consider, too.
XTRA:PSAN Earnings and Revenue Growth November 12th 2023
We note that hedge funds don't have a meaningful investment in PSI Software. Our data shows that Investmentaktiengesellschaft FÜR Langfristige Investoren Tgv is the largest shareholder with 21% of shares outstanding. In comparison, the second and third largest shareholders hold about 18% and 8.2% of the stock.
To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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 PSI Software
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
We can see that insiders own shares in PSI Software SE. As individuals, the insiders collectively own €30m worth of the €362m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over PSI Software. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Public Company Ownership
Public companies currently own 18% of PSI Software stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for PSI Software that you should be aware of before investing here.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport on analyst forecasts.
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.
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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.
