How Much Of PSI Software AG (ETR:PSAN) Do Insiders Own?

By
Simply Wall St
Published
October 16, 2021
XTRA:PSAN
Source: Shutterstock

If you want to know who really controls PSI Software AG (ETR:PSAN), then you'll have to look at the makeup of its share registry. 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.

PSI Software is a smaller company with a market capitalization of €611m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about PSI Software.

See our latest analysis for PSI Software

ownership-breakdown
XTRA:PSAN Ownership Breakdown October 17th 2021

What Does The Institutional Ownership Tell Us About PSI Software?

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.

PSI Software already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see PSI Software's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
XTRA:PSAN Earnings and Revenue Growth October 17th 2021

PSI Software is not owned by hedge funds. Investmentaktiengesellschaft FÜR Langfristige Investoren Tgv is currently the company's largest shareholder with 21% of shares outstanding. Harvinder Singh is the second largest shareholder owning 8.1% of common stock, and Baden-Württembergische Versorgungsanstalt für Ärzte, Zahnärzte und Tierärzte holds about 5.2% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

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. 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.

Shareholders would probably be interested to learn that insiders own shares in PSI Software AG. It has a market capitalization of just €611m, and insiders have €57m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 55% of PSI Software. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand PSI Software better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report 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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