Institutional owners may take dramatic actions as Alony-Hetz Properties & Investments Ltd's (TLV:ALHE) recent 5.8% drop adds to one-year losses

Key Insights

• Given the large stake in the stock by institutions, Alony-Hetz Properties & Investments' stock price might be vulnerable to their trading decisions
• The top 6 shareholders own 51% of the company
• Insider ownership in Alony-Hetz Properties & Investments is 16%

A look at the shareholders of Alony-Hetz Properties & Investments Ltd (TLV:ALHE) can tell us which group is most powerful. The group holding the most number of shares in the company, around 57% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And so it follows that institutional investors was the group most impacted after the company's market cap fell to ₪4.5b last week after a 5.8% drop in the share price. The recent loss, which adds to a one-year loss of 16% for stockholders, may not sit well with this group of investors. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. 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.

In the chart below, we zoom in on the different ownership groups of Alony-Hetz Properties & Investments.

View our latest analysis for Alony-Hetz Properties & Investments

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

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.

As you can see, institutional investors have a fair amount of stake in Alony-Hetz Properties & Investments. 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 Alony-Hetz Properties & Investments, (below). Of course, keep in mind that there are other factors to consider, too.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Alony-Hetz Properties & Investments. The company's CEO Nathan Hetz Haitchook is the largest shareholder with 15% of shares outstanding. With 9.2% and 8.9% of the shares outstanding respectively, Phoenix Excellence Pension and Provident Ltd. and Menora Mivtachim Pensions & Gemel Ltd. are the second and third largest shareholders.

We also observed that the top 6 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.

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. 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.

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 information suggests that insiders maintain a significant holding in Alony-Hetz Properties & Investments Ltd. It is very interesting to see that insiders have a meaningful ₪707m stake in this ₪4.5b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 27% 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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Alony-Hetz Properties & Investments , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com