Every investor in The Great Eastern Shipping Company Limited (NSE:GESHIP) should know the most powerful shareholder groups. With 38% of the capital, the institutions hold the maximum number of shares in the company. In other words, the group faces the maximum upside potential (or downside risk).
And as a result, institutional investors reaped the most rewards after the company’s share price gained 9.3% last week. The one-year ROI is currently at 42% and last week’s gain would have been more than welcome.
Let’s take a closer look at what different types of shareholders can tell us about Great Eastern Shipping.
Check out our latest analysis for Great Eastern Shipping
What does institutional ownership tell us about Great Eastern Shipping?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
Great Eastern Shipping already has institutions on the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has some degree of credibility in the investment community. However, it is better to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Great Eastern Shipping’s revenue and historical earnings below, but keep in mind there’s always more to tell.
We note that hedge funds have no significant investment in Great Eastern Shipping. Ravi Sheth is currently the largest shareholder, with 12% of the shares outstanding. Bharat Sheth is the second largest shareholder with 11% of the common shares and ICICI Prudential Asset Management Company Limited owns around 7.9% of the company’s shares. Bharat Sheth, who is the second largest shareholder, also holds the title of managing director.
We dug a little deeper and found that 6 of the major shareholders make up about 50% of the register, implying that along with the large shareholders there are a few smaller shareholders, thus balancing everyone’s interests somewhat.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.
Great Eastern Shipping Insider Ownership
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
It appears that insiders hold a large share of The Great Eastern Shipping Company Limited. Insiders own ₹14 billion worth of shares in the ₹56 billion company. We 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 been buying or selling.
General public property
With a 24% stake, the general public, consisting mainly of individual investors, has some influence over Great Eastern Shipping. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
Private equity ownership
With a 7.4% stake, private equity firms could influence the Great Eastern Shipping board. Some investors might be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see the value of the company. Alternatively, these holders could exit the investment after making it public.
Private Company Ownership
We can see that private companies hold 4.6% of the shares issued. 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.
While it is worth considering the different groups that own a business, there are other, even more important factors. Be aware that Great Eastern Shipping displays 3 warning signs in our investment analysis you should know…
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.