Key Insights

• Significant control over Paymentus Holdings by private equity firms implies that the general public has more power to influence management and governance-related decisions
• Accel-KKR LLC owns 55% of the company
• Insiders have been selling lately

A look at the shareholders of Paymentus Holdings, Inc. (NYSE:PAY) can tell us which group is most powerful. The group holding the most number of shares in the company, around 55% to be precise, is private equity firms. 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% increase in the stock price last week, private equity firms profited the most, but insiders who own 20% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Paymentus Holdings.

What Does The Institutional Ownership Tell Us About Paymentus 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.

We can see that Paymentus Holdings does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Paymentus Holdings' earnings history below. Of course, the future is what really matters.

Paymentus Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Accel-KKR LLC with 55% of shares outstanding. This implies that they have majority interest control of the future of the company. Dushyant Sharma is the second largest shareholder owning 16% of common stock, and Capital Research and Management Company holds about 2.8% of the company stock. Dushyant Sharma, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 Paymentus Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Paymentus Holdings, Inc.. It is very interesting to see that insiders have a meaningful US$896m stake in this US$4.5b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% 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 an ownership of 55%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Paymentus Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Paymentus Holdings you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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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.