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Could The Blue Blends (India) Limited (NSE:BLUBLND-B) Ownership Structure Tell Us Something Useful?

Simply Wall St

The big shareholder groups in Blue Blends (India) Limited (NSE:BLUBLND-B) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'

Blue Blends (India) is not a large company by global standards. It has a market capitalization of ₹63m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about BLUBLND-B.

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Check out our latest analysis for Blue Blends (India)

NSEI:BLUBLND-B Ownership Summary, May 27th 2019

What Does The Institutional Ownership Tell Us About Blue Blends (India)?

Institutional investors commonly 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.

Blue Blends (India) already has institutions on the share registry. Indeed, they own 11% of the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 fast. This risk is higher in a company without a history of growth. You can see Blue Blends (India)'s historic earnings and revenue, below, but keep in mind there's always more to the story.

NSEI:BLUBLND-B Income Statement, May 27th 2019

We note that hedge funds don't have a meaningful investment in Blue Blends (India). As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Blue Blends (India)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 own more than half of Blue Blends (India) Limited. This gives them effective control of the company. That means they own ₹37m worth of shares in the ₹63m company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public holds a 31% stake in BLUBLND-B. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Blue Blends (India) better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.