A look at the shareholders of Brightcom Group Limited (NSE:BCG) can tell us which group is more powerful. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said he likes “a business with enduring competitive advantages that is led by capable, owner-oriented people.” So it’s nice to see some insider ownership, as it may suggest management is owner-driven.
Brightcom Group has a market capitalization of ₹179 billion, so we expect some institutional investors to have noticed the stock. Looking at our data on ownership groups (below), it appears that institutions don’t own a lot of stock in the company. We can zoom in on the different ownership groups, to learn more about Brightcom Group.
Check out our latest analysis for Brightcom Group
What does institutional ownership tell us about the Brightcom Group?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
Institutions have a very small stake in Brightcom Group. This indicates that the company is on the radar of some funds, but it is not particularly popular with professional investors at the moment. So if the business itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rise in the stock price when a few large institutions want to buy a certain stock at the same time. Earnings and revenue history, which you can see below, could be helpful in determining whether more institutional investors will want the stock. Of course, there are also many other factors to consider.
Brightcom Group is not owned by hedge funds. The company’s CEO, Muthukuru Suresh Reddy, is the largest shareholder with 7.9% of the shares outstanding. Vijay Kancharla is the second largest shareholder with 6.9% of the common shares and Sarita Commosales Llp owns approximately 5.2% of the company’s shares. Interestingly, the second largest shareholder, Vijay Kancharla, is also Top Key Executive, again, indicating strong insider ownership among the top shareholders of the company.
Looking at the shareholder register, we can see that 52% of the ownership is controlled by the 14 major shareholders, which means that no shareholder has a controlling interest in the ownership.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.
Owned by Brightcom Group Insiders
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our information suggests that insiders hold a significant stake in Brightcom Group Limited. It is very interesting to see that insiders have a significant stake of ₹48 billion in this ₹179 billion venture. Good to see this level of investment. You can check here if these insiders have bought recently.
General public property
The general public, who are usually individual investors, hold a 38% stake in Brightcom Group. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
Private Company Ownership
It appears that private companies own 28% of Brightcom Group shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as individuals. Although it is difficult to draw general conclusions, it should be noted that this is an area for further research.
Ownership of a public company
We can see that the public companies hold 4.2% of Brightcom Group shares on the show. It’s hard to say for sure, but it suggests they have intertwined business interests. This could be a strategic stake, so it’s worth monitoring this space for ownership changes.
While it is worth considering the different groups that own a business, there are other, even more important factors. Take risks for example – Brightcom Group has 2 warning signs (and 1 which is potentially serious) that we think you should know about.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.