Private equity firms in Atreyu Capital Markets Ltd (TLV:ATRY) are its biggest bettors, and their bets paid off as stock gained 12% last week

Key Insights

• The considerable ownership by private equity firms in Atreyu Capital Markets indicates that they collectively have a greater say in management and business strategy
• 54% of the business is held by the top 2 shareholders
• Institutional ownership in Atreyu Capital Markets is 25%

Every investor in Atreyu Capital Markets Ltd (TLV:ATRY) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 46% to be precise, is private equity firms. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private equity firms collectively scored the highest last week as the company hit ₪708m market cap following a 12% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Atreyu Capital Markets.

Check out our latest analysis for Atreyu Capital Markets

What Does The Institutional Ownership Tell Us About Atreyu Capital Markets?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Atreyu Capital Markets 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. 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 Atreyu Capital Markets' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Atreyu Capital Markets. Looking at our data, we can see that the largest shareholder is Leader Holdings & Investments Ltd with 46% of shares outstanding. With 8.6% and 8.5% of the shares outstanding respectively, Altshuler Shaham Ltd. and Harel Pensions and Gemel Ltd. are the second and third largest shareholders.

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.

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. 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 Atreyu Capital Markets

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data suggests that insiders own under 1% of Atreyu Capital Markets Ltd in their own names. It appears that the board holds about ₪1.9m worth of stock. This compares to a market capitalization of ₪708m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Atreyu Capital Markets. 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

With a stake of 46%, private equity firms could influence the Atreyu Capital Markets board. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Atreyu Capital Markets better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Atreyu Capital Markets , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.