Private equity firms are Delta Galil Industries Ltd.'s (TLV:DELG) biggest owners and were hit after market cap dropped ₪245m

Key Insights

• Significant control over Delta Galil Industries by private equity firms implies that the general public has more power to influence management and governance-related decisions
• 56% of the business is held by the top 2 shareholders
• 13% of Delta Galil Industries is held by insiders

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Every investor in Delta Galil Industries Ltd. (TLV:DELG) should be aware of the most powerful shareholder groups. We can see that private equity firms own the lion's share in the company with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private equity firms endured the biggest losses as the stock fell by 4.8%.

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

View our latest analysis for Delta Galil Industries

What Does The Institutional Ownership Tell Us About Delta Galil Industries?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Delta Galil Industries already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. The company's largest shareholder is GMM Capital LLC, with ownership of 46%. With 9.8% and 3.9% of the shares outstanding respectively, Noam Lautmann and Phoenix Excellence Pension and Provident Ltd. are the second and third largest shareholders. Additionally, the company's CEO Isaac Dabah directly holds 2.7% of the total shares outstanding.

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 56% stake.

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 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 most recent data indicates that insiders own a reasonable proportion of Delta Galil Industries Ltd.. Insiders own ₪634m worth of shares in the ₪4.9b company. That's quite meaningful. 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

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 46% stake in Delta Galil Industries. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

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. Case in point: We've spotted 1 warning sign for Delta Galil Industries you should be aware of.

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.

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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.