State or government among Cochin Shipyard Limited's (NSE:COCHINSHIP) largest stockholders and were hit after last week's 10% price drop

Key Insights

• The considerable ownership by state or government in Cochin Shipyard indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is India with a 68% stake
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Cochin Shipyard Limited (NSE:COCHINSHIP) should be aware of the most powerful shareholder groups. With 68% stake, state or government possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, state or government as a group endured the highest losses last week after market cap fell by ₹44b.

In the chart below, we zoom in on the different ownership groups of Cochin Shipyard.

See our latest analysis for Cochin Shipyard

What Does The Institutional Ownership Tell Us About Cochin Shipyard?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Cochin Shipyard 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 Cochin Shipyard's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Cochin Shipyard. Our data shows that India is the largest shareholder with 68% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 1.7% and 1.0%, of the shares outstanding, respectively.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Cochin Shipyard

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 data suggests that insiders own under 1% of Cochin Shipyard Limited in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹4.0m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Cochin Shipyard. 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. Case in point: We've spotted 2 warning signs for Cochin Shipyard you should be aware of, and 1 of them is potentially serious.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.