Rotem Shani Entrepreneurship and Investment Ltd. (TLV:RTSN) adds ₪52m in market cap and insiders have a 66% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Rotem Shani Entrepreneurship and Investment's growth, as seen by their sizeable ownership
• 66% of the business is held by the top 2 shareholders
• Institutions own 14% of Rotem Shani Entrepreneurship and Investment

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Every investor in Rotem Shani Entrepreneurship and Investment Ltd. (TLV:RTSN) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 66% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 10% gain.

Let's delve deeper into each type of owner of Rotem Shani Entrepreneurship and Investment, beginning with the chart below.

Check out our latest analysis for Rotem Shani Entrepreneurship and Investment

What Does The Institutional Ownership Tell Us About Rotem Shani Entrepreneurship and Investment?

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.

We can see that Rotem Shani Entrepreneurship and Investment does have institutional investors; and they hold a good portion of the company's stock. 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 Rotem Shani Entrepreneurship and Investment's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Rotem Shani Entrepreneurship and Investment. The company's largest shareholder is Yehuda Yedidya, with ownership of 33%. Avi Turiski is the second largest shareholder owning 33% of common stock, and Phoenix Investments & Finances Ltd holds about 4.3% of the company stock. Avi Turiski, who is the second-largest shareholder, also happens to hold the title of Co-Chief Executive Officer.

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 66% stake.

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 Rotem Shani Entrepreneurship and Investment

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.

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 most recent data indicates that insiders own the majority of Rotem Shani Entrepreneurship and Investment Ltd.. This means they can collectively make decisions for the company. That means they own ₪376m worth of shares in the ₪571m 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

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rotem Shani Entrepreneurship and Investment. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Rotem Shani Entrepreneurship and Investment is showing 3 warning signs in our investment analysis , and 2 of those are significant...

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.