Institutions profited after Delta Galil Industries Ltd.'s (TLV:DELG) market cap rose ₪217m last week but private equity firms profited the most

Key Insights

• The considerable ownership by private equity firms in Delta Galil Industries indicates that they collectively have a greater say in management and business strategy
• 56% of the business is held by the top 2 shareholders
• Insider ownership in Delta Galil Industries is 13%

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

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 46% stake, private equity firms possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While private equity firms were the group that benefitted the most from last week’s ₪217m market cap gain, institutions too had a 21% share in those profits.

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

See our latest analysis for Delta Galil Industries

What Does The Institutional Ownership Tell Us About Delta Galil 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.

As you can see, institutional investors have a fair amount of stake in Delta Galil Industries. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Delta Galil Industries' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Delta Galil Industries. GMM Capital LLC is currently the company's largest shareholder with 46% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.7% and 5.2% of the stock. Furthermore, CEO Isaac Dabah is the owner of 2.7% of the company's shares.

After doing some more digging, we found that the top 2 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. 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. 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.

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 most recent data indicates that insiders own a reasonable proportion of Delta Galil Industries Ltd.. It has a market capitalization of just ₪5.1b, and insiders have ₪665m 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, who are usually individual investors, hold a 20% stake in Delta Galil Industries. 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.

Private Equity Ownership

Private equity firms hold a 46% stake in Delta Galil Industries. This suggests they can be influential in key policy decisions. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Delta Galil Industries you should know about.

Of course this may not be the best stock to buy. So take a peek at this free 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.

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

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.