Institutional owners may take dramatic actions as Barbeque-Nation Hospitality Limited's (NSE:BARBEQUE) recent 13% drop adds to one-year losses

Key Insights

• Significantly high institutional ownership implies Barbeque-Nation Hospitality's stock price is sensitive to their trading actions
• The top 4 shareholders own 52% of the company
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in Barbeque-Nation Hospitality Limited (NSE:BARBEQUE) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 40% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, institutional investors endured the highest losses last week after market cap fell by ₹2.0b. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 43% for shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell Barbeque-Nation Hospitality which might hurt individual investors.

In the chart below, we zoom in on the different ownership groups of Barbeque-Nation Hospitality.

See our latest analysis for Barbeque-Nation Hospitality

What Does The Institutional Ownership Tell Us About Barbeque-Nation Hospitality?

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 Barbeque-Nation Hospitality does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Barbeque-Nation Hospitality, (below). Of course, keep in mind that there are other factors to consider, too.

Barbeque-Nation Hospitality is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Sayaji Hotels Limited with 30% of shares outstanding. Jubilant FoodWorks Limited is the second largest shareholder owning 9.3% of common stock, and UTI Asset Management Company Limited holds about 8.7% of the company stock.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Barbeque-Nation Hospitality

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

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.

We can see that insiders own shares in Barbeque-Nation Hospitality Limited. In their own names, insiders own ₹875m worth of stock in the ₹14b company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 14% 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.

Public Company Ownership

Public companies currently own 39% of Barbeque-Nation Hospitality stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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.

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 discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.