Shareholding Patterns - #2 Multibagger Magic Mantra





Shareholding pattern in simple words explains how much of the company's ownership is held by the promoters (Owners of the company) and how much is held by the public shareholders.


Imagine a company where promoters (Owners) themselves are selling out their own stocks!



This is a BIG red signal!

How can outside people be confident about the stock’s future if the promoters themselves are exiting the stock!

On the other hand, if promoters are super-confident of the company’s future revenue and profits growth they themselves will buy more stakes from the open market. They are betting their own money on the company's growth! Imagine how confident they would be about the potential ahead of them!



This is a BIG green Signal!

A quick check can help you understand the shareholding patterns and make a decision.


Here is a good shareholding pattern of a company - Maruti Suzuki (link)





Here are the shares pledged (that can be sold by promoters anytime) of Maruti Suzuki (link)




Here is a bad shareholding pattern of a company - Suzlon (link)






Here are the shares pledged (that can be sold by promoters anytime) of Suzlon (link)






Tips:

Stay away from companies where promoters holding is less than 40%
Stay away from companies where promoters have pledged to sell out majority of their stakes!


Bonus:

Also, promoter’s personality, vision, dream goals for the company and their ability to drive and execute according to plans can be taken as a huge plus while investing in stocks.

People like Dhirubhai Ambani, Mukesh Ambani, Ratan Tata, Steve Jobs, Sundar Pichai, Satya Nadela, Bill McDermott have/had tremendous passion and bold vision for creating tremendous value to the world around them and in turn max wealth for its shareholders.




Subscribe to our free newsletter!
Save & invest money wisely to achieve financial freedom.






Comments

Popular posts from this blog

Stock market investing is not at all risky!

The Growth Story - #1 Multibagger Magic Mantra