Nasdaq
華爾街日報Belrise Industries Limited's (NSE:BELRISE) most bullish insider, CEO Shrikant Badve must be pleased with the recent 11% gain
Key Insights
- Significant insider control over Belrise Industries implies vested interests in company growth
- 61% of the company is held by a single shareholder (Shrikant Badve)
- Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in Belrise Industries Limited (NSE:BELRISE) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 66% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Clearly, insiders benefitted the most after the company's market cap rose by ₹15b last week.
In the chart below, we zoom in on the different ownership groups of Belrise Industries.
Check out our latest analysis for Belrise Industries
What Does The Institutional Ownership Tell Us About Belrise Industries?
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.
As you can see, institutional investors have a fair amount of stake in Belrise Industries. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Belrise Industries, (below). Of course, keep in mind that there are other factors to consider, too.
Belrise Industries is not owned by hedge funds. With a 61% stake, CEO Shrikant Badve is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. Meanwhile, the second and third largest shareholders, hold 5.1% and 1.9%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Supriya Badve is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Belrise Industries
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Our information suggests that insiders own more than half of Belrise Industries Limited. This gives them effective control of the company. That means insiders have a very meaningful ₹106b stake in this ₹160b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.
General Public Ownership
The general public-- including retail investors -- own 23% 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.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Belrise Industries 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.
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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.