Could Toadman Interactive AB (publ)’s (STO:TOAD) Investor Composition Influence The Stock Price?

A look at the shareholders of Toadman Interactive AB (publ) (STO:TOAD) 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. 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.

Toadman Interactive is not a large company by global standards. It has a market capitalization of kr293m, which means it wouldn’t have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are not on the share registry. We can zoom in on the different ownership groups, to learn more about TOAD.

Check out our latest analysis for Toadman Interactive

OM:TOAD Ownership Summary, August 16th 2019
OM:TOAD Ownership Summary, August 16th 2019

What Does The Lack Of Institutional Ownership Tell Us About Toadman Interactive?

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. 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. Toadman Interactive’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.

OM:TOAD Income Statement, August 16th 2019
OM:TOAD Income Statement, August 16th 2019

We note that hedge funds don’t have a meaningful investment in Toadman Interactive. 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 Toadman Interactive

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 most recent data indicates that insiders own the majority of Toadman Interactive AB (publ). This means they can collectively make decisions for the company. So they have a kr149m stake in this kr293m business. 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 45% ownership, the general public have some degree of sway over TOAD. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 4.6%, of the TOAD 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 Toadman Interactive better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.