Could The Al Buhaira National Insurance Company P.S.C. (ADX:ABNIC) Ownership Structure Tell Us Something Useful?

The big shareholder groups in Al Buhaira National Insurance Company P.S.C. (ADX:ABNIC) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Al Buhaira National Insurance Company P.S.C is a smaller company with a market capitalization of د.إ450m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Al Buhaira National Insurance Company P.S.C.

See our latest analysis for Al Buhaira National Insurance Company P.S.C

What Does The Institutional Ownership Tell Us About Al Buhaira National Insurance Company P.S.C?

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.

We can see that Al Buhaira National Insurance Company P.S.C 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. 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 Al Buhaira National Insurance Company P.S.C, (below). Of course, keep in mind that there are other factors to consider, too.

Al Buhaira National Insurance Company P.S.C is not owned by hedge funds. The company's largest shareholder is Investment Group Pvt. Ltd., with ownership of 19%. Meanwhile, the second and third largest shareholders, hold 13% and 12%, of the shares outstanding, respectively. Faisal Bin Khalid Al Qasimi, 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.

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 Al Buhaira National Insurance Company P.S.C

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems insiders own a significant proportion of Al Buhaira National Insurance Company P.S.C.. Insiders own د.إ181m worth of shares in the د.إ450m company. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 31% stake in Al Buhaira National Insurance Company P.S.C. 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 Company Ownership

It seems that Private Companies own 19%, of the Al Buhaira National Insurance Company P.S.C stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Al Buhaira National Insurance Company P.S.C (including 2 which is shouldn't be ignored) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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