Tribhovandas Bhimji Zaveri Limited's (NSE:TBZ) most bullish insider, CEO Shrikant Zaveri must be pleased with the recent 10% gain

Key Insights

• Tribhovandas Bhimji Zaveri's significant insider ownership suggests inherent interests in company's expansion
• 55% of the company is held by a single shareholder (Shrikant Zaveri)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Our free stock report includes 3 warning signs investors should be aware of before investing in Tribhovandas Bhimji Zaveri. Read for free now.

To get a sense of who is truly in control of Tribhovandas Bhimji Zaveri Limited (NSE:TBZ), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 71% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 10% gain.

In the chart below, we zoom in on the different ownership groups of Tribhovandas Bhimji Zaveri.

See our latest analysis for Tribhovandas Bhimji Zaveri

What Does The Lack Of Institutional Ownership Tell Us About Tribhovandas Bhimji Zaveri?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. 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. Tribhovandas Bhimji Zaveri might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

We note that hedge funds don't have a meaningful investment in Tribhovandas Bhimji Zaveri. With a 55% stake, CEO Shrikant Zaveri is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. In comparison, the second and third largest shareholders hold about 7.9% and 6.9% of the stock. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

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. 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 Tribhovandas Bhimji Zaveri

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Tribhovandas Bhimji Zaveri Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹15b, that means they have ₹10b worth of shares. 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

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tribhovandas Bhimji Zaveri. 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

We can see that Private Companies own 7.1%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Tribhovandas Bhimji Zaveri you should be aware of, and 1 of them is a bit unpleasant.

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.

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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.