A look at the shareholders of Centum Electronics Limited (NSE:CENTUM) 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.'

With a market capitalization of ₹5.3b, Centum Electronics is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows 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 CENTUM.

View our latest analysis for Centum Electronics

What Does The Institutional Ownership Tell Us About Centum Electronics?

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 9.2% of Centum Electronics. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Centum Electronics's historic earnings and revenue, below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Centum Electronics. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Centum Electronics

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 that insiders own more than half the Centum Electronics Limited stock. This gives them a lot of power. Given it has a market cap of ₹5.3b, that means they have ₹3.7b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.