Thomas Cook (India) Limited's (NSE:THOMASCOOK) last week's 6.1% decline must have disappointed public companies who have a significant stake

Key Insights

• The considerable ownership by public companies in Thomas Cook (India) indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Fairfax Financial Holdings Limited with a 64% stake
• 11% of Thomas Cook (India) is held by Institutions

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If you want to know who really controls Thomas Cook (India) Limited (NSE:THOMASCOOK), then you'll have to look at the makeup of its share registry. We can see that public companies own the lion's share in the company with 64% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 6.1% decline in share price, public companies suffered the most losses.

Let's delve deeper into each type of owner of Thomas Cook (India), beginning with the chart below.

See our latest analysis for Thomas Cook (India)

What Does The Institutional Ownership Tell Us About Thomas Cook (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.

As you can see, institutional investors have a fair amount of stake in Thomas Cook (India). 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 Thomas Cook (India), (below). Of course, keep in mind that there are other factors to consider, too.

Thomas Cook (India) is not owned by hedge funds. Our data shows that Fairfax Financial Holdings Limited is the largest shareholder with 64% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 3.0% and 2.9%, of the shares outstanding, respectively.

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

Insider Ownership Of Thomas Cook (India)

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.

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.

Our most recent data indicates that insiders own some shares in Thomas Cook (India) Limited. It has a market capitalization of just ₹72b, and insiders have ₹1.5b worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Thomas Cook (India). 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.

Public Company Ownership

We can see that public companies hold 64% of the Thomas Cook (India) shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Thomas Cook (India) better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Thomas Cook (India) you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.