PG Electroplast Limited (NSE:PGEL) insiders have had a fantastic week as stock increased 12%, and they haven't stopped buying

Key Insights

• Significant insider control over PG Electroplast implies vested interests in company growth
• 51% of the business is held by the top 3 shareholders
• Insiders have bought recently

Every investor in PG Electroplast Limited (NSE:PGEL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 56% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Our data shows that insiders recently bought shares in the company and they were rewarded after market cap rose ₹9.0b last week.

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

View our latest analysis for PG Electroplast

What Does The Institutional Ownership Tell Us About PG Electroplast?

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.

PG Electroplast already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 PG Electroplast's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in PG Electroplast. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In PG Electroplast's case, its Senior Key Executive, Vishal Gupta, is the largest shareholder, holding 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 19% and 11%, of the shares outstanding, respectively. Interestingly, the second and third-largest shareholders also happen to be the Chief Operating Officer and Chairman of the Board, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of PG Electroplast

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.

It seems that insiders own more than half the PG Electroplast Limited stock. This gives them a lot of power. Insiders own ₹47b worth of shares in the ₹84b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over PG Electroplast. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand PG Electroplast better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for PG Electroplast you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com