Public companies in Abbott India Limited (NSE:ABBOTINDIA) are its biggest bettors, and their bets paid off as stock gained 6.1% last week

Key Insights

• Significant control over Abbott India by public companies implies that the general public has more power to influence management and governance-related decisions
• Abbott Laboratories owns 75% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Abbott India Limited (NSE:ABBOTINDIA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 75% to be precise, is public companies. 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, public companies collectively scored the highest last week as the company hit ₹617b market cap following a 6.1% gain in the stock.

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

See our latest analysis for Abbott India

What Does The Institutional Ownership Tell Us About Abbott India?

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 Abbott India 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Abbott India, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Abbott India. Abbott Laboratories is currently the company's largest shareholder with 75% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. SBI Funds Management Limited is the second largest shareholder owning 2.6% of common stock, and Canara Robeco Asset Management Company Limited holds about 1.3% of the company 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Abbott India

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 most recent data indicates that insiders own less than 1% of Abbott India 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 ₹8.7m 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

The general public, who are usually individual investors, hold a 17% stake in Abbott India. 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.

Public Company Ownership

It appears to us that public companies own 75% of Abbott India. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Abbott India that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.