Delta Galil Industries Ltd.'s (TLV:DELG) largest shareholders are private equity firms who were rewarded as market cap surged ₪259m last week

Key Insights

• Delta Galil Industries' significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 2 shareholders own 57% of the company
• 13% of Delta Galil Industries is held by insiders

To get a sense of who is truly in control of Delta Galil Industries Ltd. (TLV:DELG), it is important to understand the ownership structure of the business. With 47% stake, private equity firms possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private equity firms collectively scored the highest last week as the company hit ₪4.6b market cap following a 6.0% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Delta Galil Industries.

Check out our latest analysis for Delta Galil Industries

What Does The Institutional Ownership Tell Us About Delta Galil 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 Delta Galil 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. 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 Delta Galil Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

Delta Galil Industries is not owned by hedge funds. The company's largest shareholder is GMM Capital LLC, with ownership of 47%. Meanwhile, the second and third largest shareholders, hold 9.8% and 3.2%, of the shares outstanding, respectively. In addition, we found that Isaac Dabah, the CEO has 2.7% of the shares allocated to their name.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 57% stake.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Delta Galil Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 maintain a significant holding in Delta Galil Industries Ltd.. It has a market capitalization of just ₪4.6b, and insiders have ₪605m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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 Equity Ownership

With an ownership of 47%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

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