Public companies who hold 42% of Abu Dhabi National Takaful Company PSC (ADX:TKFL) gained 19%, institutions profited as well

Key Insights

• The considerable ownership by public companies in Abu Dhabi National Takaful Company PSC indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 69% ownership
• Institutions own 33% of Abu Dhabi National Takaful Company PSC

To get a sense of who is truly in control of Abu Dhabi National Takaful Company PSC (ADX:TKFL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While public companies were the group that benefitted the most from last week’s د.إ90m market cap gain, institutions too had a 33% share in those profits.

In the chart below, we zoom in on the different ownership groups of Abu Dhabi National Takaful Company PSC.

See our latest analysis for Abu Dhabi National Takaful Company PSC

What Does The Institutional Ownership Tell Us About Abu Dhabi National Takaful Company PSC?

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 Abu Dhabi National Takaful Company PSC does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Abu Dhabi National Takaful Company PSC'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 Abu Dhabi National Takaful Company PSC. Our data shows that Abu Dhabi Islamic Bank PJSC is the largest shareholder with 42% of shares outstanding. In comparison, the second and third largest shareholders hold about 27% and 12% of the stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 69% stake.

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 Abu Dhabi National Takaful Company PSC

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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Abu Dhabi National Takaful Company PSC. 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

We can see that Private Companies own 12%, of the shares on issue. 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.

Public Company Ownership

We can see that public companies hold 42% of the Abu Dhabi National Takaful Company PSC shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Abu Dhabi National Takaful Company PSC you should be aware of, and 1 of them is concerning.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.