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What Is The Ownership Structure Like For PSC Insurance Group Limited (ASX:PSI)?

Simply Wall St

The big shareholder groups in PSC Insurance Group Limited (ASX:PSI) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. 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.

With a market capitalization of AU$743m, PSC Insurance Group is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about PSC Insurance Group.

See our latest analysis for PSC Insurance Group

ASX:PSI Ownership Breakdown July 12th 2020
ASX:PSI Ownership Breakdown July 12th 2020

What Does The Institutional Ownership Tell Us About PSC Insurance Group?

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.

PSC Insurance Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at PSC Insurance Group's earnings history, below. Of course, the future is what really matters.

ASX:PSI Earnings and Revenue Growth July 12th 2020
ASX:PSI Earnings and Revenue Growth July 12th 2020

PSC Insurance Group is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Paul Dwyer with 23% of shares outstanding. The second and third largest shareholders are Brian Austin and John Dwyer, with an equal amount of shares to their name at 12%. Interestingly, the third-largest shareholder, John Dwyer is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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 it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 PSC Insurance Group

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 PSC Insurance Group Limited stock. This gives them a lot of power. So they have a AU$408m stake in this AU$743m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 29% ownership, the general public have some degree of sway over PSI. 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.

Private Company Ownership

Our data indicates that Private Companies hold 6.3%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand PSC Insurance Group better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with PSC Insurance Group .

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.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.