How Much Of Sree Rayalaseema Hi-Strength Hypo Limited (NSE:SRHHYPOLTD) Do Insiders Own?

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If you want to know who really controls Sree Rayalaseema Hi-Strength Hypo Limited (NSE:SRHHYPOLTD), then you’ll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’

With a market capitalization of ₹2.8b, Sree Rayalaseema Hi-Strength Hypo is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutional investors have not yet purchased shares. Let’s delve deeper into each type of owner, to discover more about SRHHYPOLTD.

Check out our latest analysis for Sree Rayalaseema Hi-Strength Hypo

NSEI:SRHHYPOLTD Ownership Summary, May 29th 2019
NSEI:SRHHYPOLTD Ownership Summary, May 29th 2019

What Does The Lack Of Institutional Ownership Tell Us About Sree Rayalaseema Hi-Strength Hypo?

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 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. Sree Rayalaseema Hi-Strength Hypo’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.

NSEI:SRHHYPOLTD Income Statement, May 29th 2019
NSEI:SRHHYPOLTD Income Statement, May 29th 2019

Hedge funds don’t have many shares in Sree Rayalaseema Hi-Strength Hypo. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Sree Rayalaseema Hi-Strength Hypo

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Sree Rayalaseema Hi-Strength Hypo Limited. It has a market capitalization of just ₹2.8b, and insiders have ₹347m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, with a 34% stake in the company, will not easily be ignored. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 51%, of the company’s shares. 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.

Public Company Ownership

It appears to us that public companies own 3.2% of SRHHYPOLTD. It’s hard to say for sure, but this suggests they have entwined business interests. This might be a strategic stake, so it’s worth watching this space for changes in ownership.

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.

Of course this may not be the best stock to buy. So take a peek at this free 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.