Private companies who have a significant stake must be disappointed along with institutions after Shemen Yielding Real Estate Ltd's (TLV:SMNR) market cap dropped by ₪172m

Key Insights

• Significant control over Shemen Yielding Real Estate by private companies implies that the general public has more power to influence management and governance-related decisions
• 66% of the business is held by the top 2 shareholders
• Insider ownership in Shemen Yielding Real Estate is 22%

To get a sense of who is truly in control of Shemen Yielding Real Estate Ltd (TLV:SMNR), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies 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 private companies took a hit after last week’s 21% price drop, institutions with their 22% holdings also suffered.

Let's delve deeper into each type of owner of Shemen Yielding Real Estate, beginning with the chart below.

See our latest analysis for Shemen Yielding Real Estate

What Does The Institutional Ownership Tell Us About Shemen Yielding Real Estate?

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.

We can see that Shemen Yielding Real Estate 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. 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 Shemen Yielding Real Estate, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shemen Yielding Real Estate. Memorandum Ltd. is currently the largest shareholder, with 44% of shares outstanding. The second and third largest shareholders are Zvi Ben Zvi and J.T.L.V III G.P. Ltd, with an equal amount of shares to their name at 22%.

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 66% 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 Shemen Yielding Real Estate

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of Shemen Yielding Real Estate Ltd. It has a market capitalization of just ₪636m, and insiders have ₪141m worth of shares in their own names. 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

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 44%, of the Shemen Yielding Real Estate stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 4 warning signs for Shemen Yielding Real Estate (of which 1 is a bit unpleasant!) 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.

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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.