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The big shareholder groups in APL Apollo Tubes Limited (NSE:APLAPOLLO) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.’
APL Apollo Tubes is not a large company by global standards. It has a market capitalization of ₹33b, which means it wouldn’t have the attention of many institutional investors. In the chart below below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about APLAPOLLO.
Check out our latest analysis for APL Apollo Tubes
What Does The Institutional Ownership Tell Us About APL Apollo Tubes?
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 20% of APL Apollo Tubes. 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 APL Apollo Tubes’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
We note that hedge funds don’t have a meaningful investment in APL Apollo Tubes. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of APL Apollo Tubes
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Shareholders would probably be interested to learn that insiders own shares in APL Apollo Tubes Limited. As individuals, the insiders collectively own ₹2.9b worth of the ₹33b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.