Insiders of Dharmaj Crop Guard Limited (NSE:DHARMAJ) must be disappointed as stock fell 11% after recent purchases

Key Insights

• Insiders appear to have a vested interest in Dharmaj Crop Guard's growth, as seen by their sizeable ownership
• The top 2 shareholders own 51% of the company
• Insiders have bought recently

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A look at the shareholders of Dharmaj Crop Guard Limited (NSE:DHARMAJ) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 72% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And looking at our data, we can see that insiders have bought shares recently. Their expectations, however, were not satisfied, as the market cap dropped to ₹9.0b over the past week.

In the chart below, we zoom in on the different ownership groups of Dharmaj Crop Guard.

See our latest analysis for Dharmaj Crop Guard

What Does The Institutional Ownership Tell Us About Dharmaj Crop Guard?

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.

Dharmaj Crop Guard already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Dharmaj Crop Guard's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Dharmaj Crop Guard. From our data, we infer that the largest shareholder is Rameshbhai Talavia (who also holds the title of Top Key Executive) with 27% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. For context, the second largest shareholder holds about 25% of the shares outstanding, followed by an ownership of 6.6% by the third-largest shareholder. Interestingly, the second-largest shareholder, Jamankumar Talavia is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders. In addition, we found that Vishalbhai Domadia, the CEO has 4.1% of the shares allocated to their name.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Dharmaj Crop Guard

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Dharmaj Crop Guard Limited. This gives them effective control of the company. Given it has a market cap of ₹9.0b, that means they have ₹6.4b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Dharmaj Crop Guard. 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:

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 like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.