Rotem Shani Entrepreneurship and Investment Ltd.'s (TLV:RTSN) market cap increased by ₪42m, insiders receive a 66% cut

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
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Rotem Shani Entrepreneurship and Investment Ltd. (TLV:RTSN) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 66% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by ₪42m last week.

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

View our latest analysis for Rotem Shani Entrepreneurship and Investment

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

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 Rotem Shani Entrepreneurship and Investment. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Rotem Shani Entrepreneurship and Investment, (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 Rotem Shani Entrepreneurship and Investment. Yehuda Yedidya is currently the largest shareholder, with 33% of shares outstanding. Avi Turiski is the second largest shareholder owning 33% of common stock, and Phoenix Excellence Pension and Provident 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Rotem Shani Entrepreneurship and Investment

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders own more than half of Rotem Shani Entrepreneurship and Investment Ltd.. This gives them effective control of the company. Given it has a market cap of ₪448m, that means they have ₪297m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Rotem Shani Entrepreneurship and Investment better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Rotem Shani Entrepreneurship and Investment (at least 2 which are a bit unpleasant) , and understanding them should be part of your investment process.

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.

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.