The big shareholder groups in AMD Industries Limited (NSE:AMDIND) have power over the company. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. 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.
AMD Industries is a smaller company with a market capitalization of ₹258m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutional investors have not yet purchased much of the company. Let’s take a closer look to see what the different types of shareholder can tell us about AMD Industries.
What Does The Lack Of Institutional Ownership Tell Us About AMD Industries?
We don’t tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it’s not particularly common.
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. Alternatively, there might be something about the company that has kept institutional investors away. AMD Industries’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.
AMD Industries is not owned by hedge funds. The company’s CEO Adit Gupta is the largest shareholder with 32% of shares outstanding. The second…