Stock Analysis

Abu Dhabi Islamic Bank PJSC's (ADX:ADIB) market cap dropped د.إ1.7b last week; Individual investors bore the brunt

  •  Updated
ADX:ADIB
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A look at the shareholders of Abu Dhabi Islamic Bank PJSC (ADX:ADIB) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, individual investors as a group endured the highest losses last week after market cap fell by د.إ1.7b.

Let's take a closer look to see what the different types of shareholders can tell us about Abu Dhabi Islamic Bank PJSC.

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

ownership-breakdown
ADX:ADIB Ownership Breakdown October 4th 2022

What Does The Institutional Ownership Tell Us About Abu Dhabi Islamic Bank PJSC?

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.

Abu Dhabi Islamic Bank PJSC 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Abu Dhabi Islamic Bank PJSC, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
ADX:ADIB Earnings and Revenue Growth October 4th 2022

Hedge funds don't have many shares in Abu Dhabi Islamic Bank PJSC. Looking at our data, we can see that the largest shareholder is Emirates International Investment Company LLC with 39% of shares outstanding. Mamoura Diversified Global Holding PJSC is the second largest shareholder owning 7.6% of common stock, and The Vanguard Group, Inc. holds about 1.6% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Abu Dhabi Islamic Bank PJSC

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Abu Dhabi Islamic Bank PJSC. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 39%, private equity firms could influence the Abu Dhabi Islamic Bank PJSC board. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Abu Dhabi Islamic Bank PJSC .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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

Find out whether Abu Dhabi Islamic Bank PJSC 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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About ADX:ADIB

Abu Dhabi Islamic Bank PJSC

Abu Dhabi Islamic Bank PJSC provides banking, financing, and investing services in the United Arab Emirates and internationally.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation1
Future Growth2
Past Performance5
Financial Health4
Dividends3

Read more about these checks in the individual report sections or in our analysis model.

Solid track record with adequate balance sheet.