Recent 11% pullback would hurt Israel Shipyards Industries Ltd (TLV:ISHI) insiders

Key Insights

• Israel Shipyards Industries' significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 60% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Israel Shipyards Industries Ltd (TLV:ISHI), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 60% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to ₪2.0b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Israel Shipyards Industries.

See our latest analysis for Israel Shipyards Industries

What Does The Institutional Ownership Tell Us About Israel Shipyards Industries?

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.

As you can see, institutional investors have a fair amount of stake in Israel Shipyards Industries. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Israel Shipyards Industries' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Israel Shipyards Industries. The Gold Bond Group Ltd. is currently the company's largest shareholder with 20% of shares outstanding. The second and third largest shareholders are Samy Katsav and Atalya Shmeltzer, with an equal amount of shares to their name at 20%.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Israel Shipyards Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders own more than half of Israel Shipyards Industries Ltd. This gives them effective control of the company. So they have a ₪1.2b stake in this ₪2.0b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Israel Shipyards Industries. 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.

Public Company Ownership

We can see that public companies hold 20% of the Israel Shipyards Industries 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Israel Shipyards Industries better, we need to consider many other factors. For instance, we've identified 1 warning sign for Israel Shipyards Industries that you should be aware of.

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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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.