After the recent decline, Nelcast Limited (NSE:NELCAST) CEO P. Deepak's holdings have lost 12% of their value

Key Insights

• Insiders appear to have a vested interest in Nelcast's growth, as seen by their sizeable ownership
• P. Deepak owns 56% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

A look at the shareholders of Nelcast Limited (NSE:NELCAST) can tell us which group is most powerful. With 78% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by ₹1.5b.

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

Check out our latest analysis for Nelcast

What Does The Lack Of Institutional Ownership Tell Us About Nelcast?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Nelcast might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Nelcast is not owned by hedge funds. With a 56% stake, CEO P. Deepak is the largest shareholder. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. In comparison, the second and third largest shareholders hold about 19% and 2.7% of the stock.

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. 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 Nelcast

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.

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 most recent data indicates that insiders own the majority of Nelcast Limited. This means they can collectively make decisions for the company. That means they own ₹8.7b worth of shares in the ₹11b 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, who are usually individual investors, hold a 19% stake in Nelcast. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Nelcast better, we need to consider many other factors. Be aware that Nelcast is showing 1 warning sign in our investment analysis , you should know about...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.