Could The Emirates Insurance Company P.J.S.C. (ADX:EIC) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
September 08, 2021
ADX:EIC
Source: Shutterstock

A look at the shareholders of Emirates Insurance Company P.J.S.C. (ADX:EIC) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of د.إ945m, Emirates Insurance Company P.J.S.C is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Emirates Insurance Company P.J.S.C.

See our latest analysis for Emirates Insurance Company P.J.S.C

ownership-breakdown
ADX:EIC Ownership Breakdown September 9th 2021

What Does The Institutional Ownership Tell Us About Emirates Insurance Company P.J.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.

Emirates Insurance Company P.J.S.C already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Emirates Insurance Company P.J.S.C, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
ADX:EIC Earnings and Revenue Growth September 8th 2021

Emirates Insurance Company P.J.S.C is not owned by hedge funds. The company's largest shareholder is Mazrui Holdings L.L.C., with ownership of 15%. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 12% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 11 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Emirates Insurance Company P.J.S.C

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our most recent data indicates that insiders own some shares in Emirates Insurance Company P.J.S.C.. It has a market capitalization of just د.إ945m, and insiders have د.إ22m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a substantial 58% stake in Emirates Insurance Company P.J.S.C, suggesting it is a fairly popular stock. 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.

Private Company Ownership

Our data indicates that Private Companies hold 15%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Emirates Insurance Company P.J.S.C that you should be aware of before investing here.

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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