Honeywell Automation India Limited's (NSE:HONAUT) 3.5% loss last week hit both individual investors who own 75% as well as institutions

Key Insights

• The considerable ownership by public companies in Honeywell Automation India indicates that they collectively have a greater say in management and business strategy
• Honeywell International Inc. owns 75% of the company
• Institutions own 13% of Honeywell Automation India

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A look at the shareholders of Honeywell Automation India Limited (NSE:HONAUT) can tell us which group is most powerful. We can see that public companies own the lion's share in the company with 75% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions, who own 13% shares weren’t spared from last week’s ₹11b market cap drop, public companies as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Honeywell Automation India.

Check out our latest analysis for Honeywell Automation India

What Does The Institutional Ownership Tell Us About Honeywell Automation 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.

As you can see, institutional investors have a fair amount of stake in Honeywell Automation India. 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. 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 Honeywell Automation India's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Honeywell Automation India. Looking at our data, we can see that the largest shareholder is Honeywell International Inc. with 75% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 5.1% and 1.4% of the stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Honeywell Automation India

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 less than 1% of Honeywell Automation 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 ₹6.9m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in Honeywell Automation 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

We can see that public companies hold 75% of the Honeywell Automation India shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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 always like to check for a history of revenue growth. You can too, by accessing this free chart of 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.