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The big shareholder groups in Aban Offshore Limited (NSE:ABAN) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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.’
Aban Offshore is not a large company by global standards. It has a market capitalization of ₹4.4b, which means it wouldn’t have the attention of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about ABAN.
View our latest analysis for Aban Offshore
What Does The Institutional Ownership Tell Us About Aban Offshore?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Aban Offshore already has institutions on the share registry. Indeed, they own 14% of the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Aban Offshore’s earnings history, below. Of course, the future is what really matters.
We note that hedge funds don’t have a meaningful investment in Aban Offshore. 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 Aban Offshore
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. 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.
It seems insiders own a significant proportion of Aban Offshore Limited. Insiders own ₹907m worth of shares in the ₹4.4b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.