Stock Analysis

Proton Motor Power Systems Plc's (LON:PPS) CEO Faiz Nahab is the most upbeat insider, and their holdings increased by 19% last week

  •  Updated
AIM:PPS
Source: Shutterstock

A look at the shareholders of Proton Motor Power Systems Plc (LON:PPS) can tell us which group is most powerful. With 83% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by UK£35m last week.

Let's delve deeper into each type of owner of Proton Motor Power Systems, beginning with the chart below.

Our analysis indicates that PPS is potentially undervalued!

ownership-breakdown
AIM:PPS Ownership Breakdown December 5th 2022

What Does The Institutional Ownership Tell Us About Proton Motor Power Systems?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Since institutions own only a small portion of Proton Motor Power Systems, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
AIM:PPS Earnings and Revenue Growth December 5th 2022

Proton Motor Power Systems is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Faiz Nahab with 82% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. With 1.2% and 1.0% of the shares outstanding respectively, Puma Investment Management Limited and W H Ireland Group plc, Asset Management Arm are the second and third largest shareholders.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Proton Motor Power Systems

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

It seems that insiders own more than half the Proton Motor Power Systems Plc stock. This gives them a lot of power. So they have a UK£180m stake in this UK£217m business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Proton Motor Power Systems. 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.

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. Take risks for example - Proton Motor Power Systems has 4 warning signs (and 2 which don't sit too well with us) we think you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Proton Motor Power Systems is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis