Thorney Technologies Ltd (ASX:TEK) share price fell 14% last week; individual investors would not be happy

A look at the shareholders of Thorney Technologies Ltd (ASX:TEK) can tell us which group is the most powerful. The group holding the largest number of shares in the company, around 49% to be precise, are made up of individual investors. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

While insiders, who own 19% of the shares, were not spared by the A$23 million drop in market capitalization last week, individual investors as a group suffered the maximum losses.

In the table below, we zoom in on the different ownership groups of Thorney Technologies.

Check out our latest analysis for Thorney Technologies

ASX: TEK Ownership Breakdown January 27, 2022

What does institutional ownership tell us about Thorney Technologies?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

Institutions have a very small stake in Thorney Technologies. This indicates that the company is on the radar of some funds, but it is not particularly popular with professional investors at the moment. So if the business itself can improve over time, we may well see more institutional buyers in the future. When several institutional investors wish to buy shares, we often see a rise in the price of the share. Past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
ASX: TEK earnings and revenue growth January 27, 2022

We note that hedge funds have no significant investment in Thorney Technologies. Our data shows that Thorney Investment Group Australia Pty. ltd. is the main shareholder with 17% of the outstanding shares. In comparison, the second and third shareholders hold approximately 9.5% and 7.6% of the shares.

After digging a little deeper, we found that the top 17 held combined ownership of 50% of the company, suggesting that no single shareholder has significant control over the company.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.

Thorney Technologies Insider Property

The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Thorney Technologies Ltd. It has a market capitalization of just A$149 million, and insiders hold A$28 million worth of shares in their own names. It’s great to see insiders so invested in the company. It might be worth checking to see if these insiders have bought recently.

General public property

The general public, who are generally individual investors, hold 49% of the capital of Thorney Technologies. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other large shareholders.

Private equity ownership

The private equity firms hold a 17% stake in Thorney Technologies. This suggests that they can influence key policy decisions. 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 company. Alternatively, these holders could exit the investment after making it public.

Private Company Ownership

We can see that private companies hold 11% of the issued shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as individuals. Although it is difficult to draw general conclusions, it should be noted that this is an area for further research.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. Know that Thorney Technologies shows 3 warning signs in our investment analysis and 1 of them makes us a little uncomfortable…

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Karen J. Nelson