Persistent Systems Limited's (NSE:PERSISTENT) high institutional ownership speaks for itself as stock continues to impress, up 5.0% over last week
If you want to know who really controls Persistent Systems Limited (NSE:PERSISTENT), then you'll have to look at the makeup of its share registry. With 40% stake, institutions 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.
And things are looking up for institutional investors after the company gained ₹17b in market cap last week. One-year return to shareholders is currently 12% and last week’s gain was the icing on the cake.
In the chart below, we zoom in on the different ownership groups of Persistent Systems.
View our latest analysis for Persistent Systems
What Does The Institutional Ownership Tell Us About Persistent Systems?
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.
Persistent Systems already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Persistent Systems' earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Persistent Systems. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Persistent Systems' case, its Top Key Executive, Anand Deshpande, is the largest shareholder, holding 31% of shares outstanding. Kotak Mahindra Asset Management Company Limited is the second largest shareholder owning 4.9% of common stock, and Axis Asset Management Company Limited holds about 3.4% of the company stock.
We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Persistent Systems
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own a reasonable proportion of Persistent Systems Limited. It has a market capitalization of just ₹351b, and insiders have ₹129b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. 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.
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.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
Persistent Systems Limited provides software products, services, and technology solutions in India, North America, and internationally.
High growth potential with solid track record and pays a dividend.