The big shareholder groups in Tax-Net S.A. (WSE:TXN) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.
Tax-Net is a smaller company with a market capitalization of zł1.4m, 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. We can zoom in on the different ownership groups, to learn more about Tax-Net.
What Does The Lack Of Institutional Ownership Tell Us About Tax-Net?
Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Tax-Net might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
We note that hedge funds don’t have a meaningful investment in Tax-Net. Halina Glosna is currently the largest shareholder, with 26% of shares outstanding. The second and third largest shareholders are Mariusz Malesza and Grazyna Nelip, each holding around 26% of the shares outstanding. Grazyna Nelip also happens to hold the title of Member of Supervisory Board.
Additionally, we found that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.
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 Tax-Net
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.
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 own more than half of Tax-Net S.A.. This gives them effective control of the company. That means they own zł1.1m worth of shares in the zł1.4m company. That’s quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 22% ownership, the general public have some degree of sway over TXN. 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.
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 4 warning signs for Tax-Net (2 can’t be ignored!) that you should be aware of before investing here.
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 firstname.lastname@example.org. 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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