Public companies among Direct Finance of Direct Group (2006) Ltd's (TLV:DIFI) largest stockholders and were hit after last week's 7.6% price drop

By
Simply Wall St
Published
March 16, 2022
TASE:DIFI
Source: Shutterstock

If you want to know who really controls Direct Finance of Direct Group (2006) Ltd (TLV:DIFI), then you'll have to look at the makeup of its share registry. We can see that public companies own the lion's share in the company with 47% ownership. 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, public companies as a group endured the highest losses last week after market cap fell by ₪175m.

In the chart below, we zoom in on the different ownership groups of Direct Finance of Direct Group (2006).

Check out our latest analysis for Direct Finance of Direct Group (2006)

ownership-breakdown
TASE:DIFI Ownership Breakdown March 16th 2022

What Does The Institutional Ownership Tell Us About Direct Finance of Direct Group (2006)?

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.

We can see that Direct Finance of Direct Group (2006) does have institutional investors; and they hold a good portion of the company's stock. 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 Direct Finance of Direct Group (2006)'s historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TASE:DIFI Earnings and Revenue Growth March 16th 2022

Direct Finance of Direct Group (2006) is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Zur Shamir Holdings Ltd with 47% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 1.0%, of the shares outstanding, respectively.

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.

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. 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 Direct Finance of Direct Group (2006)

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.

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 information suggests that Direct Finance of Direct Group (2006) Ltd insiders own under 1% of the company. It has a market capitalization of just ₪2.1b, and the board has only ₪16m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Direct Finance of Direct Group (2006). 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.

Public Company Ownership

We can see that public companies hold 47% of the Direct Finance of Direct Group (2006) shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Direct Finance of Direct Group (2006) (of which 2 are significant!) you should know about.

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.

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