Jyoti CNC Automation Limited (NSE:JYOTICNC) CEO Parakramsinh Jadeja's holdings dropped 4.2% in value as a result of the recent pullback

Key Insights

• Significant insider control over Jyoti CNC Automation implies vested interests in company growth
• 58% of the business is held by the top 3 shareholders
• 14% of Jyoti CNC Automation is held by Institutions

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Every investor in Jyoti CNC Automation Limited (NSE:JYOTICNC) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 4.2%.

In the chart below, we zoom in on the different ownership groups of Jyoti CNC Automation.

View our latest analysis for Jyoti CNC Automation

What Does The Institutional Ownership Tell Us About Jyoti CNC Automation?

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.

We can see that Jyoti CNC Automation 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 Jyoti CNC Automation's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Jyoti CNC Automation. With a 27% stake, CEO Parakramsinh Jadeja is the largest shareholder. In comparison, the second and third largest shareholders hold about 16% and 14% of the stock.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Jyoti CNC Automation

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. 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.

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 information suggests that insiders own more than half of Jyoti CNC Automation Limited. This gives them effective control of the company. That means insiders have a very meaningful ₹148b stake in this ₹248b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Jyoti CNC Automation. 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.

Private Company Ownership

We can see that Private Companies own 16%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jyoti CNC Automation better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Jyoti CNC Automation , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.