What Kind Of Investor Owns Most Of Sree Rayalaseema Hi-Strength Hypo Limited (NSE:SRHHYPOLTD)?

Simply Wall St

Mon, Sep 2, 2019, 9:24 PM

The big shareholder groups in Sree Rayalaseema Hi-Strength Hypo Limited (NSE:SRHHYPOLTD) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. 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.

With a market capitalization of ₹1.7b, Sree Rayalaseema Hi-Strength Hypo is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions don't own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about SRHHYPOLTD.

Check out our latest analysis for Sree Rayalaseema Hi-Strength Hypo

NSEI:SRHHYPOLTD Ownership Summary, September 3rd 2019

What Does The Lack Of Institutional Ownership Tell Us About Sree Rayalaseema Hi-Strength Hypo?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Sree Rayalaseema Hi-Strength Hypo might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

NSEI:SRHHYPOLTD Income Statement, September 3rd 2019

We note that hedge funds don't have a meaningful investment in Sree Rayalaseema Hi-Strength Hypo. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Sree Rayalaseema Hi-Strength Hypo

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.

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 insiders own a significant proportion of Sree Rayalaseema Hi-Strength Hypo Limited. It has a market capitalization of just ₹1.7b, and insiders have ₹210m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 34% stake in SRHHYPOLTD. 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.

Private Company Ownership

It seems that Private Companies own 51%, of the SRHHYPOLTD stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

We can see that public companies hold 3.2%, of the SRHHYPOLTD shares on issue. It's hard to say for sure, but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sree Rayalaseema Hi-Strength Hypo better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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