Harel Insurance Investments & Financial Services Ltd's (TLV:HARL) largest shareholders are private companies who were rewarded as market cap surged ₪241m last week

Key Insights

• The considerable ownership by private companies in Harel Insurance Investments & Financial Services indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 52% of the company
• 20% of Harel Insurance Investments & Financial Services is held by Institutions

Every investor in Harel Insurance Investments & Financial Services Ltd (TLV:HARL) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies were the biggest beneficiaries of last week’s 4.0% gain.

In the chart below, we zoom in on the different ownership groups of Harel Insurance Investments & Financial Services.

See our latest analysis for Harel Insurance Investments & Financial Services

What Does The Institutional Ownership Tell Us About Harel Insurance Investments & Financial Services?

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.

Harel Insurance Investments & Financial Services 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 Harel Insurance Investments & Financial Services' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Harel Insurance Investments & Financial Services. Our data shows that G.Y.N. Economic Advice & Management Ltd is the largest shareholder with 47% of shares outstanding. With 4.5% and 2.4% of the shares outstanding respectively, Phoenix Excellence Pension and Provident Ltd. and Phoenix Investments & Finances Ltd are the second and third largest shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Harel Insurance Investments & Financial Services

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.

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 data suggests that insiders own under 1% of Harel Insurance Investments & Financial Services Ltd in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around ₪18m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Harel Insurance Investments & Financial Services. 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 47%, of the Harel Insurance Investments & Financial Services stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Harel Insurance Investments & Financial Services you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.