Is Al Ain Ahlia Insurance Company P.S.C.'s (ADX:ALAIN) Shareholder Ownership Skewed Towards Insiders?

By
Simply Wall St
Published
September 01, 2021
ADX:ALAIN
Source: Shutterstock

If you want to know who really controls Al Ain Ahlia Insurance Company P.S.C. (ADX:ALAIN), then you'll have to look at the makeup of its share registry. 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 Ain Ahlia Insurance Company P.S.C is not a large company by global standards. It has a market capitalization of د.إ504m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased shares. We can zoom in on the different ownership groups, to learn more about Al Ain Ahlia Insurance Company P.S.C.

See our latest analysis for Al Ain Ahlia Insurance Company P.S.C

ownership-breakdown
ADX:ALAIN Ownership Breakdown September 2nd 2021

What Does The Lack Of Institutional Ownership Tell Us About Al Ain Ahlia Insurance Company P.S.C?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Al Ain Ahlia Insurance Company P.S.C might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

earnings-and-revenue-growth
ADX:ALAIN Earnings and Revenue Growth September 2nd 2021

We note that hedge funds don't have a meaningful investment in Al Ain Ahlia Insurance Company P.S.C. The company's largest shareholder is Mamoura Diversified Global Holding PJSC, with ownership of 20%. Mohamed Jouan Al Badi Al Dhaeri is the second largest shareholder owning 16% of common stock, and Khalid Bin Juan AL Badie holds about 5.5% of the company stock. Khalid Bin Juan AL Badie, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

Our studies suggest that the top 6 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 Ain Ahlia 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.

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 most recent data indicates that insiders own a reasonable proportion of Al Ain Ahlia Insurance Company P.S.C.. Insiders have a د.إ128m stake in this د.إ504m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public collectively holds 55% of Al Ain Ahlia Insurance Company P.S.C shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Al Ain Ahlia Insurance Company P.S.C is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. So take a peek at this free 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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