Could Jullundur Motor Agency (Delhi) Limited’s (NSE:JMA) Investor Composition Influence The Stock Price?

The big shareholder groups in Jullundur Motor Agency (Delhi) Limited (NSE:JMA) have power over the company. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

Jullundur Motor Agency (Delhi) is not a large company by global standards. It has a market capitalization of ₹768m, which means it wouldn’t have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutional investors have not yet purchased shares. We can zoom in on the different ownership groups, to learn more about JMA.

See our latest analysis for Jullundur Motor Agency (Delhi)

NSEI:JMA Ownership Summary, November 4th 2019
NSEI:JMA Ownership Summary, November 4th 2019

What Does The Lack Of Institutional Ownership Tell Us About Jullundur Motor Agency (Delhi)?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Jullundur Motor Agency (Delhi), for yourself, below.

NSEI:JMA Income Statement, November 4th 2019
NSEI:JMA Income Statement, November 4th 2019

We note that hedge funds don’t have a meaningful investment in Jullundur Motor Agency (Delhi). Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Jullundur Motor Agency (Delhi)

The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 most recent data indicates that insiders own the majority of Jullundur Motor Agency (Delhi) Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹768m, that means they have ₹499m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, with a 33% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.