Public companies in Property & Building Corp. Ltd. (TLV:PTBL) are its biggest bettors, and their bets paid off as stock gained 6.2% last week

Key Insights

• Significant control over Property & Building by public companies implies that the general public has more power to influence management and governance-related decisions
• 71% of the company is held by a single shareholder (Discount Investment Corporation Ltd.)
• 13% of Property & Building is held by Institutions

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A look at the shareholders of Property & Building Corp. Ltd. (TLV:PTBL) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 71% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, public companies were the biggest beneficiaries of last week’s 6.2% gain.

In the chart below, we zoom in on the different ownership groups of Property & Building.

See our latest analysis for Property & Building

What Does The Institutional Ownership Tell Us About Property & Building?

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.

Property & Building already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Property & Building, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Property & Building. Looking at our data, we can see that the largest shareholder is Discount Investment Corporation Ltd. with 71% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Clal Pension And Gemel Ltd is the second largest shareholder owning 6.5% of common stock, and Yelin Lapidot Holdings Ltd. holds about 1.5% 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 Property & Building

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Property & Building. 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

It appears to us that public companies own 71% of Property & Building. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Property & Building you should be aware of, and 1 of them is significant.

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.