Wealth First Portfolio Managers Limited's (NSE:WEALTH) most bullish insider, CEO Ashish Shah must be pleased with the recent 12% gain

Key Insights

• Significant insider control over Wealth First Portfolio Managers implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 64% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Wealth First Portfolio Managers Limited (NSE:WEALTH), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 64% 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, insiders scored the highest last week as the company hit ₹18b market cap following a 12% gain in the stock.

Let's delve deeper into each type of owner of Wealth First Portfolio Managers, beginning with the chart below.

Check out our latest analysis for Wealth First Portfolio Managers

What Does The Lack Of Institutional Ownership Tell Us About Wealth First Portfolio Managers?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Wealth First Portfolio Managers, for yourself, below.

Hedge funds don't have many shares in Wealth First Portfolio Managers. The company's CEO Ashish Shah is the largest shareholder with 32% of shares outstanding. With 32% and 0.04% of the shares outstanding respectively, Hena Shah and Wealth First Advisors Pvt. Ltd. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Hena Shah is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 64% stake.

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

Insider Ownership Of Wealth First Portfolio Managers

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.

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.

Our information suggests that insiders own more than half of Wealth First Portfolio Managers Limited. This gives them effective control of the company. That means they own ₹12b worth of shares in the ₹18b company. That's quite meaningful. 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-- including retail investors -- own 36% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wealth First Portfolio Managers better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Wealth First Portfolio Managers (of which 1 is concerning!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.