Institutions profited after PSI Software SE's (ETR:PSAN) market cap rose €37m last week but individual investors profited the most
In This Article:
Key Insights
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The considerable ownership by individual investors in PSI Software indicates that they collectively have a greater say in management and business strategy
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53% of the business is held by the top 4 shareholders
Every investor in PSI Software SE (ETR:PSAN) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 38% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While individual investors were the group that benefitted the most from last week’s €37m market cap gain, institutions too had a 35% share in those profits.
Let's delve deeper into each type of owner of PSI Software, beginning with the chart below.
See our latest analysis for PSI Software
What Does The Institutional Ownership Tell Us About PSI Software?
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 PSI Software 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. 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.
PSI Software is not owned by hedge funds. The company's largest shareholder is Investmentaktiengesellschaft FüR Langfristige Investoren Tgv, with ownership of 21%. E.ON SE is the second largest shareholder owning 18% of common stock, and Harvinder Singh holds about 8.2% of the company stock.
To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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.