Recent 8.3% pullback would hurt Israel Shipyards Industries Ltd (TLV:ISHI) insiders

Key Insights

• Insiders appear to have a vested interest in Israel Shipyards Industries' growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 60% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Israel Shipyards Industries Ltd (TLV:ISHI) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 60% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 8.3% decline in share price, insiders suffered the most losses.

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

Check out our latest analysis for Israel Shipyards Industries

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

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Israel Shipyards Industries 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. 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 Israel Shipyards Industries, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Israel Shipyards Industries. Our data shows that Samy Katsav is the largest shareholder with 20% of shares outstanding. The second and third largest shareholders are Shlomi Fogel and The Gold Bond Group Ltd., 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.

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. 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

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders own more than half of Israel Shipyards Industries Ltd. This gives them effective control of the company. Given it has a market cap of ₪2.7b, that means they have ₪1.6b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

It appears to us that public companies own 20% of Israel Shipyards Industries. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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 example, we've discovered 3 warning signs for Israel Shipyards Industries that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.