Private equity firms are Sequent Scientific Limited's (NSE:SEQUENT) biggest owners and were hit after market cap dropped ₹6.0b
Key Insights
- Significant control over Sequent Scientific by private equity firms implies that the general public has more power to influence management and governance-related decisions
- The Carlyle Group Inc. owns 52% of the company
- 17% of Sequent Scientific is held by Institutions
Every investor in Sequent Scientific Limited (NSE:SEQUENT) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private equity firms with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And last week, private equity firms endured the biggest losses as the stock fell by 11%.
Let's take a closer look to see what the different types of shareholders can tell us about Sequent Scientific.
Check out our latest analysis for Sequent Scientific
What Does The Institutional Ownership Tell Us About Sequent Scientific?
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.
As you can see, institutional investors have a fair amount of stake in Sequent Scientific. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Sequent Scientific's earnings history below. Of course, the future is what really matters.
Sequent Scientific is not owned by hedge funds. The company's largest shareholder is The Carlyle Group Inc., with ownership of 52%. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 9.5% and 3.3%, of the shares outstanding, respectively.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Sequent Scientific
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 data cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.
General Public Ownership
The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
With an ownership of 52%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Sequent Scientific better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Sequent Scientific you should be aware of.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.
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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.