Do Insiders Own Lots Of Shares In Splitit Payments Ltd (ASX:SPT)?

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Simply Wall St

Wed, Aug 12, 2020, 10:32 PM 5 min read

A look at the shareholders of Splitit Payments Ltd (ASX:SPT) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of 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.

Splitit Payments is not a large company by global standards. It has a market capitalization of AU$531m, 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 institutional investors have not yet purchased much of the company. Let's take a closer look to see what the different types of shareholder can tell us about Splitit Payments.

View our latest analysis for Splitit Payments

ownership-breakdown — ASX:SPT Ownership Breakdown August 13th 2020

What Does The Institutional Ownership Tell Us About Splitit Payments?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Less than 5% of Splitit Payments is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth — ASX:SPT Earnings and Revenue Growth August 13th 2020

Hedge funds don't have many shares in Splitit Payments. Victoria Krain is currently the company's largest shareholder with 9.0% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.5% and 7.3% of the stock. Alon Feit, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Brad Paterson, the CEO has 0.0053752999999999995 of the shares allocated to his name

After doing some more digging, we found that the top 14 have the combined ownership of 50% in the company, suggesting that no one share holder has significant control over the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Splitit Payments

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 a reasonable proportion of Splitit Payments Ltd. Insiders have a AU$155m stake in this AU$531m business. 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.

General Public Ownership

The general public holds a 42% stake in SPT. 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

Our data indicates that Private Companies hold 19%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Splitit Payments you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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