Every investor in Ador Welding Limited (NSE: ADORWELD) needs to know the most powerful groups of shareholders. Large companies usually have institutions as shareholders, and we usually see insiders holding shares in smaller companies. Warren Buffett said he enjoys “a business with sustainable competitive advantages that is led by skilled, owner-oriented people.” So it’s nice to see some insider ownership as it may suggest that the management is owner-driven.
With a market cap of 8.3b, Ador Welding is a small cap stock, so it might not be well known to many institutional investors. In the graph below, we can see that institutional investors have bought into the company. Let’s take a closer look at what different types of shareholders can tell us about Ador Welding.
Check out our latest analysis for Ador Welding
What does institutional ownership tell us about Ador Welding?
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 businesses to have some institutions listed, especially if they are growing.
We can see that Ador Welding has institutional investors; and they own a good portion of the company’s stock. This may indicate that the company has a certain degree of credibility in the investment community. However, it’s best to beware of relying on the so-called validation that comes with institutional investors. They too are sometimes wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Ador Welding’s earnings history below. Of course, the future is what really matters.
Ador Welding is not owned by hedge funds. JB Advani and Company Private Limited is currently the largest shareholder, with 50% of the shares outstanding. Essentially, this means that they have considerable influence, if not absolute control, over the future of the business. In comparison, the second and third shareholders hold around 6.4% and 3.5% of the capital. In addition, the CEO of the company, Aditya Malkani, directly owns 1.0% of the total shares outstanding.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. As far as I know, there is no analyst coverage of the company, so it probably goes under the radar.
Insider Property of Ador Welding
The definition of company insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in certain circumstances.
It appears that insiders own a significant proportion of Ador Welding Limited. Insiders hold Â£ 871 million of shares in the company 8.3b. I would say this shows alignment with shareholders, but it should be noted that the company is still quite small; some insiders may have founded the company. You can click here to see if these insiders have bought or sold.
General public property
The general public holds 23% of the capital of Ador Welding. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
Owned by a private company
We can see that the private companies own 50% of the issued shares. It is difficult to draw conclusions from this fact alone, so it is worth considering who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
It’s always worth thinking about the different groups that own shares in a company. But to understand Ador Welding better, there are many other factors that we need to consider. Consider, for example, the ever-present specter of investment risk. We have identified 3 warning signs with Ador Welding (at least 1 that cannot be ignored), and understanding them should be part of your investment process.
Of course this might not be the best stock to buy. So take a look at this free free list of interesting companies.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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