Aura Investments Ltd.'s (TLV:AURA) top holders are insiders and they are likely disappointed by the recent 5.0% drop

Key Insights

• Insiders appear to have a vested interest in Aura Investments' growth, as seen by their sizeable ownership
• 57% of the business is held by the top 2 shareholders
• 40% of Aura Investments is held by Institutions

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To get a sense of who is truly in control of Aura Investments Ltd. (TLV:AURA), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to ₪6.2b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Aura Investments.

Check out our latest analysis for Aura Investments

What Does The Institutional Ownership Tell Us About Aura Investments?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Aura 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 Aura Investments' 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 Aura Investments. Igal Atrakchi is currently the largest shareholder, with 47% of shares outstanding. Clal Pension And Gemel Ltd is the second largest shareholder owning 10% of common stock, and Menora Mivtachim Provident Funds holds about 9.3% of the company stock.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Aura 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Aura Investments Ltd.. It is very interesting to see that insiders have a meaningful ₪2.9b stake in this ₪6.2b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Aura Investments better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Aura Investments (of which 1 is concerning!) you should know about.

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.