InterCure Ltd.'s (TLV:INCR) 11% gain last week benefited both individual investors who own 42% as well as insiders

By
Simply Wall St
Published
March 21, 2022
TASE:INCR
Source: Shutterstock

A look at the shareholders of InterCure Ltd. (TLV:INCR) can tell us which group is most powerful. With 42% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s ₪103m market cap gain, insiders too had a 41% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about InterCure.

See our latest analysis for InterCure

ownership-breakdown
TASE:INCR Ownership Breakdown March 21st 2022

What Does The Institutional Ownership Tell Us About InterCure?

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 InterCure 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 InterCure's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TASE:INCR Earnings and Revenue Growth March 21st 2022

Hedge funds don't have many shares in InterCure. With a 27% stake, CEO Alexander Rabinovich is the largest shareholder. Yael Fegel is the second largest shareholder owning 9.6% of common stock, and Ibex Investors LLC holds about 4.2% of the company stock.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of InterCure

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.

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.

It seems insiders own a significant proportion of InterCure Ltd.. Insiders have a ₪421m stake in this ₪1.0b business. 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

With a 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over InterCure. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - InterCure has 1 warning sign we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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