Do Insiders Own Shares In KNR Constructions Limited (NSE:KNRCON)?

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If you want to know who really controls KNR Constructions Limited (NSE:KNRCON), then you’ll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.’

KNR Constructions is a smaller company with a market capitalization of ₹40b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about KNRCON.

View our latest analysis for KNR Constructions

NSEI:KNRCON Ownership Summary, June 19th 2019
NSEI:KNRCON Ownership Summary, June 19th 2019

What Does The Institutional Ownership Tell Us About KNR Constructions?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

KNR Constructions already has institutions on the share registry. Indeed, they own 34% of the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. 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 KNR Constructions’s earnings history, below. Of course, the future is what really matters.

NSEI:KNRCON Income Statement, June 19th 2019
NSEI:KNRCON Income Statement, June 19th 2019

Hedge funds don’t have many shares in KNR Constructions. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of KNR Constructions

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.

Our information suggests that insiders own more than half of KNR Constructions Limited. This gives them effective control of the company. That means they own ₹22b worth of shares in the ₹40b company. That’s quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 10% ownership, the general public have some degree of sway over KNRCON. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand KNR Constructions better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.