Key Insights
- Significant insider control over Route Mobile implies vested interests in company growth
- The top 2 shareholders own 50% of the company
- own 25% of Route Mobile
Every investor in Route Mobile Limited (NSE:ROUTE) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 59% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And last week, insiders endured the biggest losses as the stock fell by 5.6%.
In the chart below, we zoom in on the different ownership groups of Route Mobile.
See our latest analysis for Route Mobile
What Does The Institutional Ownership Tell Us About Route Mobile?
Institutional investors usually 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.
We can see that Route Mobile does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility among professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 quickly. This risk is higher in a company without a history of growth. You can see Route Mobile’s historic earnings and revenue below, but keep in mind there’s always more to the story.
Hedge funds don’t have many shares in Route Mobile. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Route Mobile’s case, its Top Key Executive, Sandipkumar Gupta, is the largest shareholder, holding 29% of outstanding shares. With 21% and 5.0% of the shares outstanding respectively, Rajdip Kumar Gupta and Goldman Sachs Asset Management, LP are the second and third largest shareholders. Interestingly, the second-largest shareholder, Rajdip Kumar Gupta is also Chief Executive Officer, again, pointing towards strong insider ownership among the company’s top shareholders.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.
Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Route Mobile
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
It seems that insiders own more than half the Route Mobile Limited stock. This gives them a lot of power. Given it has a market cap of ₹71b, that means they have ₹42b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Route Mobile. While this size of ownership may not be enough to sway a policy decision in their favor, they can still make a collective impact on company policies.
Next Steps:
It’s always worth thinking about the different groups who own shares in a company. But to understand Route Mobile better, we need to consider many other factors. Be aware of that Route Mobile is showing 1 warning sign in our investment analysis you should know about…
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take into account your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.