Motisons Jewellers Limited (NSE:MOTISONS) surges 26%; private companies who own 35% shares profited along with insiders

Key Insights

• The considerable ownership by private companies in Motisons Jewellers indicates that they collectively have a greater say in management and business strategy
• 53% of the business is held by the top 4 shareholders
• 33% of Motisons Jewellers is held by insiders

A look at the shareholders of Motisons Jewellers Limited (NSE:MOTISONS) can tell us which group is most powerful. The group holding the most number of shares in the company, around 35% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 26% increase in the stock price last week, private companies profited the most, but insiders who own 33% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Motisons Jewellers.

Check out our latest analysis for Motisons Jewellers

What Does The Institutional Ownership Tell Us About Motisons Jewellers?

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.

Since institutions own only a small portion of Motisons Jewellers, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Motisons Jewellers is not owned by hedge funds. Our data shows that Motisons Global Private Limited is the largest shareholder with 19% of shares outstanding. Sanjay Chhabra is the second largest shareholder owning 16% of common stock, and Sandeep Chhabra holds about 11% of the company stock. Interestingly, the bottom two of the top three shareholders also hold the title of Co-Chief Executive Officer and Chairman of the Board, respectively, suggesting that these insiders have a personal stake in the company.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Motisons Jewellers

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 a reasonable proportion of Motisons Jewellers Limited. Insiders have a ₹8.2b stake in this ₹25b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Motisons Jewellers. 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.

Private Company Ownership

Our data indicates that Private Companies hold 35%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 Motisons Jewellers you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.