How Much Of Interma Trade S.A. (WSE:ITM) Do Insiders Own?

A look at the shareholders of Interma Trade S.A. (WSE:ITM) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.

Interma Trade is a smaller company with a market capitalization of zł11m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions don’t own shares in the company. Let’s delve deeper into each type of owner, to discover more about Interma Trade.

View 3 warning signs we detected for Interma Trade

WSE:ITM Ownership Summary, January 6th 2020
WSE:ITM Ownership Summary, January 6th 2020

What Does The Lack Of Institutional Ownership Tell Us About Interma Trade?

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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Interma Trade’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.

WSE:ITM Income Statement, January 6th 2020
WSE:ITM Income Statement, January 6th 2020

Interma Trade is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Przemyslaw Piotrowski with 17% of shares outstanding. The second largest shareholder is Vice Chairman of Management Board Tomasz Piotrowski holding17%.

Our studies suggest that the top 2 shareholders collectively control less than 50% of the company’s shares, meaning that the company’s shares are widely disseminated and there is no dominant shareholder.

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. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Interma Trade

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Interma Trade S.A.. Insiders have a zł3.7m stake in this zł11m business. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly retail investors, hold a substantial 67% stake in ITM, suggesting it is a fairly popular stock. This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

For example, we’ve discovered 3 warning signs for Interma Trade (of which 3 are major) which any shareholder or potential investor should be aware of.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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