The large shareholder groups of Tufin Software Technologies Ltd. (NYSE: TUFN) have power over the business. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. I like to see at least a little insider ownership. As Charlie Munger said, “Show me the incentive and I’ll show you the result.
With a market cap of US $ 377 million, Tufin Software Technologies is a small cap stock, so it might be overlooked by many institutional investors. In the graphic below, we can see that the institutions are visible on the share register. Let’s take a closer look at what different types of shareholders can tell us about Tufin Software Technologies.
NYSE: TUFN Ownership Breakdown October 13, 2021
What does institutional ownership tell us about Tufin Software 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’s included in a major index. . We would expect most businesses to have some institutions listed, especially if they are growing.
We can see that Tufin Software Technologies has institutional investors; and they own a large portion of the company’s shares. This may indicate that the company has a certain degree of credibility in the investment community. However, it is best not to rely on the so-called validation that comes with institutional investors. They too are sometimes wrong. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out Tufin Software Technologies’ past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.
NYSE: TUFN Profit and Revenue Growth October 13, 2021
Since institutional investors own more than half of the issued shares, the board will likely need to pay attention to their preferences. We note that the hedge funds do not have a significant investment in Tufin Software Technologies. Our data shows that Innovation Endeavors Israel is the largest shareholder with 7.7% of the shares outstanding. In comparison, the second and third shareholders hold around 6.6% and 5.3% of the capital. Reuven Kitov, who is the third shareholder, also holds the title of Chairman of the Board of Directors.
Looking at the register of shareholders, we can see that 53% of the property is controlled by the top 11 shareholders, which means that no shareholder has a controlling interest in the property.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.
Insider property of Tufin Software Technologies
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in certain circumstances.
It appears that insiders own a significant proportion of Tufin Software Technologies Ltd. Insiders own $ 39 million in shares of the $ 377 million company. It’s great to see insiders so invested in the business. it might be worth checking out if these insiders bought recently.
General public property
The general public, with a 22% stake in the company, will not be easily overlooked. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.
With a 14% stake, private equity firms could influence Tufin Software Technologies’ board of directors. 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 business. Alternatively, these holders could withdraw from the investment after making it public.
While it is worth considering the different groups that own a business, there are other factors that are even more important. Take risks for example – Tufin Software Technologies has 3 warning signs (and 1 which is a bit disturbing) we think you should know.
If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.