Every investor in Mazda Limited (NSE:MAZDALTD*) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'
Mazda is not a large company by global standards. It has a market capitalization of ₹1.8b, which means it wouldn't have the attention of many institutional investors. In the chart below below, we can see that institutional investors have not yet purchased much of the company. Let's take a closer look to see what the different types of shareholder can tell us about MAZDALTD*.
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What Does The Institutional Ownership Tell Us About Mazda?
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 Mazda, 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 business gets stronger from here, we could see a situation where more institutions are keen to buy. 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 Mazda. 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 Mazda
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
It seems that insiders own more than half the Mazda Limited stock. This gives them a lot of power. So they have a ₹1.0b stake in this ₹1.8b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.