Isras Investment Company Ltd (TLV:ISRS) surges 5.9%; public companies who own 59% shares profited along with institutions

Key Insights

• The considerable ownership by public companies in Isras Investment indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Arad Investment & Industrial Development Ltd. with a 59% stake
• 11% of Isras Investment is held by insiders

If you want to know who really controls Isras Investment Company Ltd (TLV:ISRS), then you'll have to look at the makeup of its share registry. We can see that public companies own the lion's share in the company with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Public companies gained the most after market cap touched ₪4.4b last week, while institutions who own 19% also benefitted.

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

View our latest analysis for Isras Investment

What Does The Institutional Ownership Tell Us About Isras Investment?

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.

As you can see, institutional investors have a fair amount of stake in Isras Investment. 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 Isras Investment's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Isras Investment. Arad Investment & Industrial Development Ltd. is currently the largest shareholder, with 59% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 11% and 7.2% of the stock.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Isras Investment

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Isras Investment Company Ltd. It is very interesting to see that insiders have a meaningful ₪463m stake in this ₪4.4b 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 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Isras Investment. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

We can see that public companies hold 59% of the Isras Investment shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Isras Investment (of which 1 doesn't sit too well with us!) you should know about.

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.