Do Insiders Own Lots Of Shares In Jamna Auto Industries Limited (NSE:JAMNAAUTO)?

By
Simply Wall St
Published
November 10, 2021
NSEI:JAMNAAUTO
Source: Shutterstock

Every investor in Jamna Auto Industries Limited (NSE:JAMNAAUTO) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Jamna Auto Industries is not a large company by global standards. It has a market capitalization of ₹44b, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Jamna Auto Industries.

Check out our latest analysis for Jamna Auto Industries

ownership-breakdown
NSEI:JAMNAAUTO Ownership Breakdown November 11th 2021

What Does The Institutional Ownership Tell Us About Jamna Auto Industries?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Jamna Auto Industries already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Jamna Auto Industries' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:JAMNAAUTO Earnings and Revenue Growth November 11th 2021

Hedge funds don't have many shares in Jamna Auto Industries. Our data shows that Map Auto Ltd. is the largest shareholder with 34% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.7% and 4.5%, of the shares outstanding, respectively. Pradeep Jauhar, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Jamna Auto Industries

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.

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 information suggests that insiders maintain a significant holding in Jamna Auto Industries Limited. It has a market capitalization of just ₹44b, and insiders have ₹7.0b worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 23% ownership, the general public have some degree of sway over Jamna Auto Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 37%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jamna Auto Industries better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Jamna Auto Industries , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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