The recent лв123m market cap decrease is likely to have disappointed insiders invested in Gradus AD (BUL:GR6)

Key Insights

• Significant insider control over Gradus AD implies vested interests in company growth
• The top 2 shareholders own 87% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

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Every investor in Gradus AD (BUL:GR6) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 87% 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 following last week's 49% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Gradus AD, beginning with the chart below.

View our latest analysis for Gradus AD

What Does The Lack Of Institutional Ownership Tell Us About Gradus AD?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Gradus AD's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Gradus AD is not owned by hedge funds. The company's largest shareholder is Angel Angelov, with ownership of 44%. For context, the second largest shareholder holds about 43% of the shares outstanding, followed by an ownership of 0.002% by the third-largest shareholder. Bistra Kotseva, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Gradus AD

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders own more than half of Gradus AD. This gives them effective control of the company. That means they own лв218m worth of shares in the лв252m company. That's quite meaningful. 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-- including retail investors -- own 13% stake in the company, and hence can't 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Gradus AD better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Gradus AD you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.