Do Insiders Own Lots Of Shares In Butterfly Gandhimathi Appliances Limited (NSE:BUTTERFLY)?

The big shareholder groups in Butterfly Gandhimathi Appliances Limited (NSE:BUTTERFLY) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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.

Butterfly Gandhimathi Appliances is a smaller company with a market capitalization of ₹8.3b, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Butterfly Gandhimathi Appliances.

See our latest analysis for Butterfly Gandhimathi Appliances

What Does The Institutional Ownership Tell Us About Butterfly Gandhimathi Appliances?

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.

As you can see, institutional investors have a fair amount of stake in Butterfly Gandhimathi Appliances. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Butterfly Gandhimathi Appliances' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Butterfly Gandhimathi Appliances. V M Chettiar & Sons India Pvt.Ltd. is currently the largest shareholder, with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 17% and 7.0%, of the shares outstanding, respectively. V. Seshadri, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO V. Lakshminarayanan directly holds 5.6% of the total shares outstanding.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Butterfly Gandhimathi Appliances

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.

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 information suggests that insiders maintain a significant holding in Butterfly Gandhimathi Appliances Limited. It has a market capitalization of just ₹8.3b, and insiders have ₹2.5b worth of shares in their own names. 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

With a 23% ownership, the general public have some degree of sway over Butterfly Gandhimathi Appliances. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 37%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Butterfly Gandhimathi Appliances (of which 1 is concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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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