Insiders have been selling Priority Technology Holdings, Inc. (NASDAQ:PRTH) recently yet still hold a significant stake; 14% drop last week not ideal

• Significant insider control over Priority Technology Holdings implies vested interests in company growth
• 61% of the company is held by a single shareholder (Thomas Priore)
• Recent sales by insiders

A look at the shareholders of Priority Technology Holdings, Inc. (NASDAQ:PRTH) can tell us which group is most powerful. The group holding the most number of shares in the company, around 76% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And our data suggests that insiders own the top position in the company’s share registry despite recent sales. As a result, the group bore the brunt of last week’s US$68m market cap loss.

Let’s delve deeper into each type of owner of Priority Technology Holdings, beginning with the chart below.

See our latest analysis for Priority Technology Holdings

NasdaqCM:PRTH Ownership Breakdown October 24th 2024 What Does The Institutional Ownership Tell Us About Priority Technology Holdings?

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 companies to have some institutions on the register, especially if they are growing.

Since institutions own only a small portion of Priority Technology Holdings, many may not have spent much time considering the stock. But it’s clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

NasdaqCM:PRTH Earnings and Revenue Growth October 24th 2024

We note that hedge funds don’t have a meaningful investment in Priority Technology Holdings. With a 61% stake, CEO Thomas Priore is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It’s usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we’re glad to see a company insider with such skin in the game. In comparison, the second and third largest shareholders hold about 11% and 6.8% of the stock.

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 Priority Technology Holdings

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 the majority of Priority Technology Holdings, Inc.. This means they can collectively make decisions for the company. So they have a US$339m stake in this US$447m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public– including retail investors — own 13% stake in the company, and hence can’t easily be ignored. 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 Equity Ownership

With a stake of 6.8%, private equity firms could influence the Priority Technology Holdings board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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 Priority Technology Holdings you should be aware of, and 1 of them is concerning.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.