Is StrongPoint ASA's (OB:STRO) Shareholder Ownership Skewed Towards Insiders?

By
Simply Wall St
Published
August 31, 2021
OB:STRO
Source: Shutterstock

The big shareholder groups in StrongPoint ASA (OB:STRO) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

StrongPoint is a smaller company with a market capitalization of kr1.4b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about StrongPoint.

View our latest analysis for StrongPoint

ownership-breakdown
OB:STRO Ownership Breakdown September 1st 2021

What Does The Institutional Ownership Tell Us About StrongPoint?

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 StrongPoint does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 StrongPoint, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
OB:STRO Earnings and Revenue Growth September 1st 2021

Hedge funds don't have many shares in StrongPoint. Looking at our data, we can see that the largest shareholder is Strømstangen AS with 8.9% of shares outstanding. For context, the second largest shareholder holds about 5.0% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder.

After doing some more digging, we found that the top 14 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of StrongPoint

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own a reasonable proportion of StrongPoint ASA. It has a market capitalization of just kr1.4b, and insiders have kr158m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public holds a 37% stake in StrongPoint. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 22%, of the StrongPoint stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand StrongPoint better, we need to consider many other factors. For example, we've discovered 2 warning signs for StrongPoint that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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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