Institutional investors are Altshuler Shaham Finance Ltd's (TLV:ALTF) biggest bettors and were rewarded after last week's ₪189m market cap gain

Key Insights

• Significantly high institutional ownership implies Altshuler Shaham Finance's stock price is sensitive to their trading actions
• The largest shareholder of the company is Altshuler Shaham Ltd. with a 55% stake
• Insider ownership in Altshuler Shaham Finance is 15%

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A look at the shareholders of Altshuler Shaham Finance Ltd (TLV:ALTF) can tell us which group is most powerful. The group holding the most number of shares in the company, around 59% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week’s 11% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 56%.

In the chart below, we zoom in on the different ownership groups of Altshuler Shaham Finance.

View our latest analysis for Altshuler Shaham Finance

What Does The Institutional Ownership Tell Us About Altshuler Shaham Finance?

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.

Altshuler Shaham Finance already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Altshuler Shaham Finance's historic earnings and revenue below, but keep in mind there's always more to the story.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Altshuler Shaham Finance is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Altshuler Shaham Ltd. with 55% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Yair Levinstein is the second largest shareholder owning 15% of common stock, and Ayalon Mutual Funds Ltd. holds about 0.6% of the company stock. Yair Levinstein, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Altshuler Shaham Finance

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 most recent data indicates that insiders own a reasonable proportion of Altshuler Shaham Finance Ltd. Insiders have a ₪282m stake in this ₪1.9b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Altshuler Shaham Finance. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Altshuler Shaham Finance better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Altshuler Shaham Finance (of which 1 is potentially serious!) you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.