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What Kind Of Shareholder Appears On The NRB Bearings Limited’s (NSE:NRBBEARING) Shareholder Register?

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A look at the shareholders of NRB Bearings Limited (NSE:NRBBEARING) can tell us which group is most powerful. 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.’

 

NRB Bearings is a smaller company with a market capitalization of ?9.5b, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about NRBBEARING.

What Does The Institutional Ownership Tell Us About NRB Bearings?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.


NRB Bearings already has institutions on the share registry. Indeed, they own 23% of the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of NRB Bearings, (below). Of course, keep in mind that there are other factors to consider, too.


We note that hedge funds don’t have a meaningful investment in NRB Bearings. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of NRB Bearings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.


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.


Our information suggests that insiders maintain a significant holding in NRB Bearings Limited. Insiders own ?1.8b worth of shares in the ?9.5b company. This may suggest that the founders still own a lot of shares.

General Public Ownership

The general public holds a 12% stake in NRBBEARING. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 10.0% stake in NRBBEARING. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and — as the name suggests — don’t invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 35%, of the NRBBEARING stock. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

 

2019-09-11