Precision Wires India Limited's (NSE:PRECWIRE) most bullish insider is Senior Key Executive Milan Mehta, and their holdings value went up by 26% last week

Key Insights

• Precision Wires India's significant insider ownership suggests inherent interests in company's expansion
• The top 4 shareholders own 54% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Precision Wires India Limited (NSE:PRECWIRE) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 26% gain.

In the chart below, we zoom in on the different ownership groups of Precision Wires India.

View our latest analysis for Precision Wires India

What Does The Institutional Ownership Tell Us About Precision Wires India?

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.

Since institutions own only a small portion of Precision Wires India, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in Precision Wires India. Our data suggests that Milan Mehta, who is also the company's Senior Key Executive, holds the most number of shares at 20%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Galvawire Agencies Private Limited is the second largest shareholder owning 15% of common stock, and Deepak Mehta holds about 12% of the company stock. Interestingly, the third-largest shareholder, Deepak Mehta is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders. Additionally, the company's CEO Mahendra Mehta directly holds 3.7% of the total shares outstanding.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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

Insider Ownership Of Precision Wires India

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own a reasonable proportion of Precision Wires India Limited. Insiders own ₹16b worth of shares in the ₹35b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 34% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 16%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Precision Wires India , and understanding them should be part of your investment process.

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.