Is Al Buhaira National Insurance Company P.S.C.'s (ADX:ABNIC) Shareholder Ownership Skewed Towards Insiders?

A look at the shareholders of Al Buhaira National Insurance Company P.S.C. (ADX:ABNIC) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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 not a large company by global standards. It has a market capitalization of د.إ425m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. 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.

Check out 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?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

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. 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 Al Buhaira National Insurance Company P.S.C'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 Al Buhaira National Insurance Company P.S.C. Salem Abdulla Al Hosani is currently the largest shareholder, with 16% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 12% by the third-largest shareholder. Faisal Bin Khalid Al Qasimi, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Al Buhaira National Insurance Company P.S.C

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.

Our information suggests that insiders own more than half of Al Buhaira National Insurance Company P.S.C.. This gives them effective control of the company. Given it has a market cap of د.إ425m, that means they have د.إ219m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, with a 39% stake in the company, will not easily be ignored. 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.

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 instance, we've identified 3 warning signs for Al Buhaira National Insurance Company P.S.C (2 are a bit concerning) that 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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