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Every investor in Prime Financial Group Limited (ASX:PFG) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.
With a market capitalization of AU$14m, Prime Financial Group is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions don't own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about PFG.
View our latest analysis for Prime Financial Group
What Does The Lack Of Institutional Ownership Tell Us About Prime Financial Group?
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. Alternatively, there might be something about the company that has kept institutional investors away. Prime Financial Group'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.
Hedge funds don't have many shares in Prime Financial Group. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Prime Financial Group
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 Prime Financial Group Limited. Insiders own AU$4.3m worth of shares in the AU$14m company. 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.