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Dixon Technologies (India) Limited’s (NSE:DIXON) Top Key Executive Sunil Vachani is the most upbeat insider, and their holdings increased by 4.4% last week


If you want to know who really controls Dixon Technologies (India) Limited (NSE:DIXON), then you’ll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company’s market cap rose by ₹11b last week.

In the chart below, we zoom in on the different ownership groups of Dixon Technologies (India).

If you’re not interested in researching DIXON’s ownership structure, we have a free list of interesting investing ideas to potentially inspire your next investment!

NSEI:DIXON Ownership Breakdown September 16th 2022

What Does The Institutional Ownership Tell Us About Dixon Technologies (India)?

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.

Dixon Technologies (India) already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Dixon Technologies (India)’s historic earnings and revenue below, but keep in mind there’s always more to the story.

earnings-and-revenue-growth
NSEI:DIXON Earnings and Revenue Growth September 16th 2022

Dixon Technologies (India) is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Dixon Technologies (India)’s case, its Top Key Executive, Sunil Vachani, is the largest shareholder, holding 41% of shares outstanding. Life Insurance Corporation of India, Asset Management Arm is the second largest shareholder owning 5.7% of common stock, and Atul Lall holds about 3.5% of the company stock. Interestingly, the third-largest shareholder, Atul Lall is also a Vice Chairman, again, indicating strong insider ownership amongst the company’s top shareholders.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 Dixon Technologies (India)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Dixon Technologies (India) Limited. It is very interesting to see that insiders have a meaningful ₹131b stake in this ₹272b business. 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 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Dixon Technologies (India). While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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 account of 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.

Valuation is complex, but we’re helping make it simple.

Find out whether Dixon Technologies (India) is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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