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The big shareholder groups in Indian Metals and Ferro Alloys Limited (NSE:IMFA) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.
Indian Metals and Ferro Alloys is not a large company by global standards. It has a market capitalization of ₹6.5b, which means it wouldn’t have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don’t own many shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about IMFA.
View our latest analysis for Indian Metals and Ferro Alloys
What Does The Institutional Ownership Tell Us About Indian Metals and Ferro Alloys?
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.
Since institutions own under 5% of Indian Metals and Ferro Alloys, 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.
We note that hedge funds don’t have a meaningful investment in Indian Metals and Ferro Alloys. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Indian Metals and Ferro Alloys
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.