To get an idea of who is really in control of Newgen Software Technologies Limited (NSE:NEWGEN), it is important to understand the ownership structure of the company. And the group that owns the biggest slice of the pie is individual inmates with 57% ownership. Put another way, the group faces maximum upside potential (or downside risk).
As a result, experts were the biggest beneficiaries of last week’s 10% gain.
In the chart below, we zoom in on the different ownership groups of Newgen Software Technologies.
Check out our latest analysis of Newgen Software Technologies
What does institutional ownership tell us about Newgen software technologies?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. Therefore, they generally consider buying larger companies that are included in the relevant benchmark.
As you can see, institutional investors have a significant stake in Newgen Software Technologies. This suggests some credibility among professional investors. But we can’t rely on that fact alone, as institutions sometimes make bad investments, just like everyone else. If several institutions change their opinion on a stock at the same time, it is possible for the share price to drop rapidly. So it’s worth looking at Newgen Software Technologies’ earnings record below. Of course, the future is what really matters.
We note that hedge funds do not have a significant investment in Newgen Software Technologies. From our data, we infer that the largest shareholder is Diwakar Nigam (who also holds the title of Top Key Executive) with 23% of the outstanding shares. It is generally considered a good sign when members of the company own a significant number of shares in the company, and in this case we are pleased to see a member of the company play the role of a key stakeholder. With 22% and 9.4% of the outstanding shares respectively, T. Varadarajan and Priyadarshini Nigam are the second and third largest shareholder. Interestingly, the second and third largest shareholders also happen to be the Chief Executive Officer and the Member of the Board of Directors, respectively. Again, this means considerable insider ownership among the company’s major shareholders.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company’s shares, which implies that they have considerable power to influence company decisions.
Researching institutional ownership is a good way to measure and filter the expected return of a stock. The same can be achieved by studying the sentiments of analysts. Quite a few analysts cover stocks, so you could see expected growth quite easily.
Internal property of Newgen software technologies
The definition of company insiders can be subjective and varies between jurisdictions. Our data reflects individual inside information, capturing board members at a minimum. Ultimately, management is accountable to the board. However, it is not uncommon for managers to be members of the executive board, especially if they are founders or CEOs.
Internal ownership is positive when it indicates that the leaders are thinking like the true owners of the company. However, high internal ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a majority of Newgen Software Technologies Limited. This means that they can collectively make decisions for the company. So they have a 16 billion rupee stake in this 28 billion rupee business. It’s good to see this level of investment. You can check here to see if those experts have been buying recently.
general public property
With 18% ownership, the general public, made up mostly of individual investors, has some degree of influence over Newgen Software Technologies. While this size of ownership may not be enough to sway a political decision in your favor, they can still have a collective impact on company policies.
private equity ownership
Private equity firms hold a 5.5% stake in Newgen Software Technologies. This suggests that they can influence key political decisions. Sometimes we see private equity stick around for the long haul, but generally speaking they have a shorter investment horizon and, as the name suggests, don’t invest much in public companies. After a while, they may look to sell and redistribute the capital elsewhere.
Next steps:
I find it very interesting to observe who exactly is the owner of a company. But to get a real picture, we must also consider other information. Please note that Newgen Software Technologies is displaying 1 warning sign in our investment analysis you should know about…
But lately it’s the future, not the past, that will determine how well the owners of this business will do. So we think it’s worth taking a look at this free report that shows whether analysts are predicting a brighter future.
Note: The figures in this article are calculated using data from the last twelve months, which refers to the 12-month period ending on the last day of the month in which the financial statement is dated. This may not be consistent with the annual report figures for the full year.
Valuation is complex, but we are helping to simplify it.
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This Simply Wall St article is general in nature. We provide feedback based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell any stock, and it does not take into account your goals or financial situation. Our goal is to provide you with long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative material. Simply Wall St does not have a position in any of the mentioned stocks.