The recent 16% gain must have brightened Top Key Executive Vaibhav Shah's week, Monarch Networth Capital Limited's (NSE:MONARCH) most bullish insider

Key Insights

• Insiders appear to have a vested interest in Monarch Networth Capital's growth, as seen by their sizeable ownership
• 54% of the business is held by the top 8 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Monarch Networth Capital Limited (NSE:MONARCH) should be aware of the most powerful shareholder groups. With 60% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 16% gain.

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

View our latest analysis for Monarch Networth Capital

What Does The Institutional Ownership Tell Us About Monarch Networth Capital?

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.

We can see that Monarch Networth Capital does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Monarch Networth Capital's historic earnings and revenue below, but keep in mind there's always more to the story.

Monarch Networth Capital is not owned by hedge funds. Our data suggests that Vaibhav Shah, who is also the company's Top Key Executive, holds the most number of shares at 14%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Suresh Bafna is the second largest shareholder owning 7.4% of common stock, and Belaben Shah holds about 7.3% of the company stock. Additionally, the company's CEO Gaurav Bhandari directly holds 5.3% of the total shares outstanding.

We did some more digging and found that 8 of the top shareholders account for roughly 54% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Monarch Networth Capital

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Monarch Networth Capital Limited stock. This gives them a lot of power. So they have a ₹17b stake in this ₹28b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Monarch Networth Capital. 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.

Private Company Ownership

We can see that Private Companies own 15%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Monarch Networth Capital 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.

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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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.