Is Klil Industries Ltd's (TLV:KLIL) Shareholder Ownership Skewed Towards Insiders?

By
Simply Wall St
Published
May 28, 2021
TASE:KLIL
Source: Shutterstock

Every investor in Klil Industries Ltd (TLV:KLIL) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Klil Industries is a smaller company with a market capitalization of ₪746m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Klil Industries.

See our latest analysis for Klil Industries

ownership-breakdown
TASE:KLIL Ownership Breakdown May 29th 2021

What Does The Institutional Ownership Tell Us About Klil Industries?

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.

As you can see, institutional investors have a fair amount of stake in Klil 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 Klil Industries' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
TASE:KLIL Earnings and Revenue Growth May 29th 2021

Hedge funds don't have many shares in Klil Industries. Tzur Daboosh is currently the company's largest shareholder with 65% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 6.1% and 5.3%, of the shares outstanding, respectively.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Klil Industries

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. 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 information suggests that insiders own more than half of Klil Industries Ltd. This gives them effective control of the company. So they have a ₪494m stake in this ₪746m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 11% ownership, the general public have some degree of sway over Klil Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 instance, we've identified 2 warning signs for Klil Industries (1 is significant) 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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