Institutions along with individual investors who hold considerable shares inTyro Payments Limited (ASX:TYR) come under pressure; lose 11% of holdings value

Simply Wall St · 10/18 00:59

Key Insights

  • The considerable ownership by individual investors in Tyro Payments indicates that they collectively have a greater say in management and business strategy
  • 44% of the business is held by the top 25 shareholders
  • 29% of Tyro Payments is held by Institutions

If you want to know who really controls Tyro Payments Limited (ASX:TYR), then you'll have to look at the makeup of its share registry. With 55% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 11% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 29% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Tyro Payments.

View our latest analysis for Tyro Payments

ownership-breakdown
ASX:TYR Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About Tyro 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.

As you can see, institutional investors have a fair amount of stake in Tyro Payments. 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 Tyro Payments' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
ASX:TYR Earnings and Revenue Growth October 18th 2024

It would appear that 6.2% of Tyro Payments shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Regal Partners Limited is currently the company's largest shareholder with 6.2% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.6% and 4.9%, of the shares outstanding, respectively.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Tyro Payments

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.

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.

We can see that insiders own shares in Tyro Payments Limited. In their own names, insiders own AU$35m worth of stock in the AU$429m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Tyro Payments shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

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. Take risks for example - Tyro Payments has 1 warning sign we think you should be aware of.

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.