Do institutions own shares of Nitro Software Limited (ASX: NTO)?
If you want to know who really controls Nitro Software Limited (ASX: NTO), then you will have to look at the makeup of their share ledger. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.
With a market cap of AU $ 536 million, Nitro Software is a small cap stock, so it may not be well known to many institutional investors. Looking at our data on ownership groups (below), it looks like institutional investors bought the company. Let’s take a closer look at what different types of shareholders can tell us about Nitro Software.
See our latest review for Nitro Software
What does institutional ownership tell us about Nitro software?
Many institutions measure their performance against an index that approximates the local market. They therefore generally pay more attention to companies that are included in the main indices.
As you can see, institutional investors have a significant stake in Nitro Software. This implies that the analysts working for these institutions have looked at the stock and they like it. But like anyone else, they could be wrong. If multiple institutions change their perspective on a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Nitro Software’s earning history below. Of course, it’s the future that really matters.
It appears that 6.4% of Nitro Software’s shares are controlled by hedge funds. This catches my attention as hedge funds sometimes try to influence management or make changes that will create short-term shareholder value. Looking at our data, we can see that the largest shareholder is Battery Ventures with 8.9% of the shares outstanding. In comparison, the second and third shareholders hold around 6.9% and 6.4% of the capital. Additionally, we found that Sam Chandler, the CEO, owns 2.2% of the shares attributed to their name.
After digging a little deeper, we found that the top 25 own a combined 50% stake in the business, suggesting that no shareholder has significant control over the business.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a lot of analysts covering the stock, so it might be interesting to see what they are planning as well.
Insider Ownership of Nitro Software
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
Most consider insider ownership to be positive because it can indicate that 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 Nitro Software Limited. The insiders have an A $ 64 million stake in the A $ 536 million company. I would say this shows alignment with shareholders, but it should be noted that the company is still quite small; some insiders may have founded the company. You can click here to see if these insiders have bought or sold.
General public property
The general public, with a 49% stake in the company, will not be easily overlooked. While this group may not necessarily get it right, it can certainly have a real influence on the way the business is run.
Private Equity Ownership
With an 8.9% stake, private equity firms could influence the board of directors of Nitro Software. Some investors might be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see the value of the business. Alternatively, these holders could withdraw from the investment after making it public.
Owned by a private company
It appears that private companies hold 4.9% of Nitro Software’s stock. It is difficult to draw conclusions from this fact alone, so it is worth considering who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
It is always worth thinking about the different groups that own shares in a company. But to better understand Nitro Software, there are many other factors that we need to consider. Consider, for example, the ever-present specter of investment risk. We have identified 3 warning signs with Nitro Software (at least 1 which is a bit worrying), and understanding them should be part of your investment process.
But finally it’s the future, not the past, which will determine the success of the owners of this business. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
If you are looking to trade Nitro Software, open an account with the cheapest * professional approved platform, Interactive brokers. Their clients from more than 200 countries and territories trade stocks, options, futures, currencies, bonds and funds around the world from a single integrated account.
This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take into account your goals or your financial situation. We aim to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative information. Simply Wall St has no position in any of the stocks mentioned.
*Interactive Brokers Ranked Least Expensive Broker By StockBrokers.com Annual Online Review 2020
Do you have any comments on this article? Concerned about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.