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A look at the shareholders of GlaxoSmithkline Pharmaceuticals Limited (NSE:GLAXO) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.
GlaxoSmithkline Pharmaceuticals is a pretty big company. It has a market capitalization of ₹247.84b. Normally institutions would own a significant portion of a company this size. Taking a look at the our data on the ownership groups (below), it’s seems that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about GLAXO.
View our latest analysis for GlaxoSmithkline Pharmaceuticals
What Does The Institutional Ownership Tell Us About GlaxoSmithkline Pharmaceuticals?
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 own 12.5% of GlaxoSmithkline Pharmaceuticals. 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. 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 GlaxoSmithkline Pharmaceuticals, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in GlaxoSmithkline Pharmaceuticals. 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 GlaxoSmithkline Pharmaceuticals
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our data suggests that insiders own under 1% of GlaxoSmithkline Pharmaceuticals Limited in their own names. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹1.8m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.