In the wake of Alony-Hetz Properties & Investments Ltd's (TLV:ALHE) latest ₪192m market cap drop, institutional owners may be forced to take severe actions

Key Insights

• Given the large stake in the stock by institutions, Alony-Hetz Properties & Investments' stock price might be vulnerable to their trading decisions
• 52% of the business is held by the top 7 shareholders
• 15% of Alony-Hetz Properties & Investments is held by insiders

A look at the shareholders of Alony-Hetz Properties & Investments Ltd (TLV:ALHE) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 49% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And institutional investors endured the highest losses after the company's share price fell by 3.9% last week. The recent loss, which adds to a one-year loss of 35% for stockholders, may not sit well with this group of investors. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. Hence, if weakness in Alony-Hetz Properties & Investments' share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.

Let's delve deeper into each type of owner of Alony-Hetz Properties & Investments, beginning with the chart below.

Check out our latest analysis for Alony-Hetz Properties & Investments

What Does The Institutional Ownership Tell Us About Alony-Hetz Properties & Investments?

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.

Alony-Hetz Properties & Investments 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 Alony-Hetz Properties & Investments' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Alony-Hetz Properties & Investments. Looking at our data, we can see that the largest shareholder is the CEO Nathan Hetz with 14% of shares outstanding. Altshuler Shaham Ltd. is the second largest shareholder owning 9.2% of common stock, and Menora Mivtachim Pensions & Gemel Ltd. holds about 8.6% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Alony-Hetz Properties & Investments

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.

Our most recent data indicates that insiders own a reasonable proportion of Alony-Hetz Properties & Investments Ltd. It is very interesting to see that insiders have a meaningful ₪722m stake in this ₪4.8b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Alony-Hetz Properties & Investments. 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. Case in point: We've spotted 4 warning signs for Alony-Hetz Properties & Investments you should be aware of, and 3 of them are potentially serious.

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.