Mizrahi Tefahot Bank Ltd.'s (TLV:MZTF) market cap touched ₪36b last week, benefiting both private companies who own 49% as well as institutions

Key Insights

• The considerable ownership by private companies in Mizrahi Tefahot Bank indicates that they collectively have a greater say in management and business strategy
• A total of 5 investors have a majority stake in the company with 54% ownership
• Institutional ownership in Mizrahi Tefahot Bank is 31%

Every investor in Mizrahi Tefahot Bank Ltd. (TLV:MZTF) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 49% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Private companies gained the most after market cap touched ₪36b last week, while institutions who own 31% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Mizrahi Tefahot Bank.

See our latest analysis for Mizrahi Tefahot Bank

What Does The Institutional Ownership Tell Us About Mizrahi Tefahot Bank?

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.

Mizrahi Tefahot Bank already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Mizrahi Tefahot Bank'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 Mizrahi Tefahot Bank. The company's largest shareholder is L.I.N Holdings Ltd, with ownership of 21%. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 7.3% by the third-largest shareholder.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Mizrahi Tefahot Bank

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.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Mizrahi Tefahot Bank. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 49%, of the Mizrahi Tefahot Bank stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Take risks for example - Mizrahi Tefahot Bank has 1 warning sign we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.