Creative Newtech Limited's (NSE:CREATIVE) most bullish insider is CEO Ketan Patel, and their holdings value went up by 13% last week

Key Insights

• Insiders appear to have a vested interest in Creative Newtech's growth, as seen by their sizeable ownership
• 56% of the company is held by a single shareholder (Ketan Patel)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Creative Newtech Limited (NSE:CREATIVE), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 57% to be precise, is individual insiders. 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 ₹1.6b last week.

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

View our latest analysis for Creative Newtech

What Does The Lack Of Institutional Ownership Tell Us About Creative Newtech?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

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. Creative Newtech'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.

We note that hedge funds don't have a meaningful investment in Creative Newtech. With a 56% stake, CEO Ketan Patel 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. With 0.4% and 0.003% of the shares outstanding respectively, Purvi Patel and Vijay Advani are the second and third largest shareholders. Note that two of the top three shareholders are also Top Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Creative Newtech

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.

It seems that insiders own more than half the Creative Newtech Limited stock. This gives them a lot of power. So they have a ₹8.0b stake in this ₹14b business. 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, who are usually individual investors, hold a 43% stake in Creative Newtech. 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 Creative Newtech you should be aware of, and 1 of them can't be ignored.

Of course this may not be the best stock to buy. So take a peek at this free 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.