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Every investor in Transformers & Rectifiers (India) Limited (NSE:TRIL) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.
Transformers & Rectifiers (India) is a smaller company with a market capitalization of ₹1.4b, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have not yet purchased much of the company. We can zoom in on the different ownership groups, to learn more about TRIL.
What Does The Institutional Ownership Tell Us About Transformers & Rectifiers (India)?
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.
Less than 5% of Transformers & Rectifiers (India) is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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 Transformers & Rectifiers (India). As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Transformers & Rectifiers (India)
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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.
It seems that insiders own more than half the Transformers & Rectifiers (India) Limited stock. This gives them a lot of power. That means they own ₹1.1b worth of shares in the ₹1.4b 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 23% ownership, the general public have some degree of sway over TRIL. 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.
It’s always worth thinking about the different groups who own shares in a company. But to understand Transformers & Rectifiers (India) better, we need to consider many other factors.
I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.
If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.
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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