Stock Analysis

While institutions invested in National Aluminium Company Limited (NSE:NATIONALUM) benefited from last week's 3.5% gain, state or government stood to gain the most

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NSEI:NATIONALUM
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A look at the shareholders of National Aluminium Company Limited (NSE:NATIONALUM) can tell us which group is most powerful. With 51% stake, state or government possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 3.5% increase in the stock price last week, state or government profited the most, but institutions who own 29% stock also stood to gain from the increase.

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

Check out the opportunities and risks within the IN Metals and Mining industry.

ownership-breakdown
NSEI:NATIONALUM Ownership Breakdown December 1st 2022

What Does The Institutional Ownership Tell Us About National Aluminium?

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 National Aluminium does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 National Aluminium's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:NATIONALUM Earnings and Revenue Growth December 1st 2022

We note that hedge funds don't have a meaningful investment in National Aluminium. India is currently the company's largest shareholder with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. Mirae Asset Global Investments Co., Ltd is the second largest shareholder owning 4.6% of common stock, and Mirae Asset Investment Managers (India) Private Limited holds about 3.3% of the company stock.

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. 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 National Aluminium

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our most recent data indicates that insiders own less than 1% of National Aluminium Company Limited. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹551k worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over National Aluminium. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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. Case in point: We've spotted 1 warning sign for National Aluminium you should be aware of.

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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