Blue Square Real Estate Ltd's (TLV:BLSR) market cap dropped ₪253m last week; individual investors who hold 56% were hit as were institutions

Key Insights

• Blue Square Real Estate's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Alon Blue Square Israel Ltd. owns 56% of the company
• 31% of Blue Square Real Estate is held by Institutions

A look at the shareholders of Blue Square Real Estate Ltd (TLV:BLSR) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 31% shares weren’t spared from last week’s ₪253m market cap drop, private companies as a group suffered the maximum losses

Let's delve deeper into each type of owner of Blue Square Real Estate, beginning with the chart below.

See our latest analysis for Blue Square Real Estate

What Does The Institutional Ownership Tell Us About Blue Square Real Estate?

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 Blue Square Real Estate 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Blue Square Real Estate's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Blue Square Real Estate. Alon Blue Square Israel Ltd. is currently the company's largest shareholder with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Menora Mivtachim Provident Funds is the second largest shareholder owning 11% of common stock, and Shlomo Eliahu Holding Ltd, Asset Management Arm holds about 8.7% of the company stock.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Blue Square Real Estate

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Blue Square Real Estate Ltd. As individuals, the insiders collectively own ₪73m worth of the ₪3.5b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 10% 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.

Private Company Ownership

It seems that Private Companies own 56%, of the Blue Square Real Estate stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Blue Square Real Estate better, we need to consider many other factors. Take risks for example - Blue Square Real Estate has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.