Retail investors among Abu Dhabi Islamic Bank PJSC's (ADX:ADIB) largest shareholders, saw gain in holdings value after stock jumped 3.1% last week

Key Insights

• Abu Dhabi Islamic Bank PJSC's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 4 investors have a majority stake in the company with 50% ownership
• Institutions own 13% of Abu Dhabi Islamic Bank PJSC

Every investor in Abu Dhabi Islamic Bank PJSC (ADX:ADIB) should be aware of the most powerful shareholder groups. With 46% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by د.إ1.2b last week.

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

Check out our latest analysis for Abu Dhabi Islamic Bank PJSC

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.

We can see that Abu Dhabi Islamic Bank PJSC does have institutional investors; and they hold a good portion of the company's stock. 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 Abu Dhabi Islamic Bank PJSC's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Abu Dhabi Islamic Bank PJSC. The company's largest shareholder is Emirates International Investment Company LLC, with ownership of 39%. Meanwhile, the second and third largest shareholders, hold 7.7% and 1.8%, of the shares outstanding, respectively. Jawaan Awaidha Suhail Al Khaili, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

To make our study more interesting, we found that the top 4 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Abu Dhabi Islamic Bank PJSC

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can see that insiders own shares in Abu Dhabi Islamic Bank PJSC. Insiders own د.إ693m worth of shares (at current prices). Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 46% stake in Abu Dhabi Islamic Bank PJSC. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

Private equity firms hold a 39% stake in Abu Dhabi Islamic Bank PJSC. This suggests they can be influential in key policy decisions. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Abu Dhabi Islamic Bank PJSC (1 is concerning!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.