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A look at the shareholders of Hind Rectifiers Limited (NSE:HIRECT) 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 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.'
Hind Rectifiers is a smaller company with a market capitalization of ₹2.1b, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions don't own many shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about HIRECT.
See our latest analysis for Hind Rectifiers
What Does The Lack Of Institutional Ownership Tell Us About Hind Rectifiers?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Hind Rectifiers might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Hind Rectifiers is not owned by hedge funds. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Hind Rectifiers
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own the majority of Hind Rectifiers Limited. This means they can collectively make decisions for the company. That means they own ₹1.2b worth of shares in the ₹2.1b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.