Stock Analysis

Peninsula Group Ltd's (TLV:PEN) latest 10% decline adds to one-year losses, institutional investors may consider drastic measures

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TASE:PEN
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To get a sense of who is truly in control of Peninsula Group Ltd (TLV:PEN), it is important to understand the ownership structure of the business. With 71% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutional investors saw their holdings value drop by 10% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 32% for shareholders. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the downtrend continues, institutions may face pressures to sell Peninsula Group, which might have negative implications on individual investors.

Let's delve deeper into each type of owner of Peninsula Group, beginning with the chart below.

Our analysis indicates that PEN is potentially undervalued!

ownership-breakdown
TASE:PEN Ownership Breakdown December 9th 2022

What Does The Institutional Ownership Tell Us About Peninsula Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Peninsula Group. 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 Peninsula Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
TASE:PEN Earnings and Revenue Growth December 9th 2022

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Peninsula Group is not owned by hedge funds. The company's largest shareholder is Meitav Investment House Ltd, with ownership of 53%. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 9.7% of the shares outstanding, followed by an ownership of 6.2% by the third-largest shareholder. Additionally, the company's CEO Micah Avni directly holds 4.6% of the total shares outstanding.

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 Peninsula Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can see that insiders own shares in Peninsula Group Ltd. In their own names, insiders own ₪23m worth of stock in the ₪417m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Peninsula Group. 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 Peninsula Group better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Peninsula Group (of which 1 doesn't sit too well with us!) you should know about.

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.

Valuation is complex, but we're helping make it simple.

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