In spite of recent selling, insiders at Stove Kraft Limited (NSE:STOVEKRAFT) are the largest shareholders; own 59% shares

Key Insights

• Significant insider control over Stove Kraft implies vested interests in company growth
• Rajendra Gandhi owns 56% of the company
• Recent sales by insiders

Every investor in Stove Kraft Limited (NSE:STOVEKRAFT) 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).

Insiders are at the top of the company's shareholdings despite selling some shares recently. As a result, they were also the biggest winners as market cap hit ₹16b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Stove Kraft.

See our latest analysis for Stove Kraft

What Does The Institutional Ownership Tell Us About Stove Kraft?

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 Stove Kraft does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Stove Kraft's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Stove Kraft. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Stove Kraft's case, its Senior Key Executive, Rajendra Gandhi, is the largest shareholder, holding 56% of shares outstanding. The second and third largest shareholders are PGIM India Asset Management Private Limited and PGIM, Inc., with an equal amount of shares to their name at 4.9%.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Stove Kraft

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Stove Kraft Limited stock. This gives them a lot of power. So they have a ₹9.5b stake in this ₹16b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Stove Kraft. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Stove Kraft has 2 warning signs we think you should be aware of.

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.

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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.