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

The big shareholder groups in Al Ain Ahlia Insurance Co. P.S.C. (ADX:ALAIN) 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 Ain Ahlia Insurance P.S.C is a smaller company with a market capitalization of د.إ555m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are not on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Al Ain Ahlia Insurance P.S.C.

Check out our latest analysis for Al Ain Ahlia Insurance P.S.C

What Does The Lack Of Institutional Ownership Tell Us About Al Ain Ahlia Insurance 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 are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Al Ain Ahlia Insurance P.S.C's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in Al Ain Ahlia Insurance P.S.C. Abu Dhabi Investment Council is currently the largest shareholder, with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 16% and 5.5% of the stock. Khalid Bin Juan AL Badie, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

A deeper look at our ownership data shows that the top 6 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Ain Ahlia Insurance 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. 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.

It seems insiders own a significant proportion of Al Ain Ahlia Insurance Co. P.S.C.. Insiders have a د.إ141m stake in this د.إ555m business. 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, who are mostly retail investors, collectively hold 55% of Al Ain Ahlia Insurance P.S.C shares. With this size 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 decline an acquisition or merger 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. For instance, we've identified 1 warning sign for Al Ain Ahlia Insurance P.S.C that you should be aware of.

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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