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A look at the shareholders of Avadh Sugar & Energy Limited (NSE:AVADHSUGAR) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.’
Avadh Sugar & Energy is a smaller company with a market capitalization of ₹4.3b, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions are noticeable on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about AVADHSUGAR.
View our latest analysis for Avadh Sugar & Energy
What Does The Institutional Ownership Tell Us About Avadh Sugar & Energy?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Avadh Sugar & Energy does have institutional investors; and they hold 7.9% of the stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Avadh Sugar & Energy, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in Avadh Sugar & Energy. 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 Avadh Sugar & Energy
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.
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.
Shareholders would probably be interested to learn that insiders own shares in Avadh Sugar & Energy Limited. As individuals, the insiders collectively own ₹385m worth of the ₹4.3b company. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.