Public companies who have a significant stake must be disappointed along with institutions after Direct Finance of Direct Group (2006)Ltd's (TLV:DIFI) market cap dropped by ₪175m

Key Insights

• Significant control over Direct Finance of Direct Group (2006)Ltd by public companies implies that the general public has more power to influence management and governance-related decisions
• A total of 2 investors have a majority stake in the company with 51% ownership
• Institutional ownership in Direct Finance of Direct Group (2006)Ltd is 37%

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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 44% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of public companies took a hit after last week’s 10% price drop, institutions with their 37% holdings also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Direct Finance of Direct Group (2006)Ltd.

View our latest analysis for Direct Finance of Direct Group (2006)Ltd

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

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.

Direct Finance of Direct Group (2006)Ltd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Direct Finance of Direct Group (2006)Ltd, (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 Direct Finance of Direct Group (2006)Ltd. Looking at our data, we can see that the largest shareholder is Zur Shamir Holdings Ltd with 44% of shares outstanding. For context, the second largest shareholder holds about 6.8% of the shares outstanding, followed by an ownership of 6.7% by the third-largest shareholder.

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 51% stake.

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. 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 Direct Finance of Direct Group (2006)Ltd

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in Direct Finance of Direct Group (2006)Ltd. In their own names, insiders own ₪84m worth of stock in the ₪1.6b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Direct Finance of Direct Group (2006)Ltd. 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 44% of the Direct Finance of Direct Group (2006)Ltd shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Direct Finance of Direct Group (2006)Ltd (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

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.