With 63% ownership in Mivne Real Estate (K.D) Ltd (TLV:MVNE), institutional investors have a lot riding on the business

Key Insights

• Significantly high institutional ownership implies Mivne Real Estate (K.D)'s stock price is sensitive to their trading actions
• A total of 4 investors have a majority stake in the company with 51% ownership
• Insiders own 21% of Mivne Real Estate (K.D)

If you want to know who really controls Mivne Real Estate (K.D) Ltd (TLV:MVNE), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 63% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And things are looking up for institutional investors after the company gained ₪255m in market cap last week. One-year return to shareholders is currently 15% and last week’s gain was the icing on the cake.

In the chart below, we zoom in on the different ownership groups of Mivne Real Estate (K.D).

View our latest analysis for Mivne Real Estate (K.D)

What Does The Institutional Ownership Tell Us About Mivne Real Estate (K.D)?

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.

We can see that Mivne Real Estate (K.D) does have institutional investors; and they hold a good portion of the company's stock. 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 Mivne Real Estate (K.D)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Mivne Real Estate (K.D). David Fuhrer is currently the largest shareholder, with 21% of shares outstanding. With 11% and 11% of the shares outstanding respectively, Migdal Mutual Funds Ltd. and Menora Mivtachim Pensions & Gemel Ltd. are the second and third largest shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Mivne Real Estate (K.D)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Mivne Real Estate (K.D) Ltd. It has a market capitalization of just ₪7.6b, and insiders have ₪1.6b worth of shares in their own names. That's quite significant. 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

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mivne Real Estate (K.D). 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Mivne Real Estate (K.D) (1 makes us a bit uncomfortable) that you should be aware of.

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.

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

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.