Institutional investors are Shikun & Binui Ltd.'s (TLV:SKBN) biggest bettors and were rewarded after last week's ₪1.1b market cap gain

Key Insights

• Institutions' substantial holdings in Shikun & Binui implies that they have significant influence over the company's share price
• The top 3 shareholders own 54% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

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If you want to know who really controls Shikun & Binui Ltd. (TLV:SKBN), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, institutional investors ended up benefitting the most after the company hit ₪9.5b in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 97%.

Let's take a closer look to see what the different types of shareholders can tell us about Shikun & Binui.

See our latest analysis for Shikun & Binui

What Does The Institutional Ownership Tell Us About Shikun & Binui?

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.

Shikun & Binui already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shikun & Binui, (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 Shikun & Binui. Looking at our data, we can see that the largest shareholder is O S Israel Investment Company with 36% of shares outstanding. With 9.3% and 8.3% of the shares outstanding respectively, Migdal Mutual Funds Ltd. and Phoenix Excellence Pension and Provident Ltd. are the second and third largest shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shikun & Binui

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.

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 Shikun & Binui Ltd. insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own ₪25m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in Shikun & Binui. 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

It seems that Private Companies own 40%, of the Shikun & Binui stock. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Shikun & Binui has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.